In 2021, public policy changes around Corporate Governance and environmental, social, and governance policies (ESG) are sure to be at the forefront of discussion in the Biden administration and halls of Congress. The Bipartisan Policy Center is confident there will be numerous opportunities for bipartisan agreement. As the transition to a new administration progresses, the early departure of SEC Chairman Jay Clayton, while not unexpected, gives the Biden team a chance to affect the direction of the independent agency. Chairman Clayton began his tenure by signaling that he wanted bipartisan support for the polices the SEC took on. Unfortunately, with the hyperpartisan environment in Washington, D.C. that proved to be a difficult challenge. While criticized over his enforcement polices, the numbers actually show that under Clayton’s leadership the SEC brought more enforcement actions than his predecessor, including $14 billion in penalties and over ten thousand examinations. As for rulemakings, the SEC finalized over 65 rules including the Regulation Best Interest and amendments to Proxy Voting Advice rules both over partisan objections.
As the exponential growth of ESG issues continues to flow south out of Wallstreet toward policymakers in Washington who the Biden team selects to lead the SEC will be vitally important for capital markets. Regardless of who is chosen, environmental, social, and governance policies will no doubt be at the forefront of discussions in the new administration and on Capitol Hill. BPC believes that there will be opportunities to reach bipartisan compromise on many of these issues and will continue to engage policymakers and the pubic as they are debated and discussed.