This post is based on a Wachtell article by Martin Lipton, John Savarese, Sarah K. Eddy, Ryan McLeod, Elina Tetelbaum, David Adlerstein, and Carmen Lu.
I. INTRODUCTION
Overview
Public companies and their boards of directors face an increasingly complex array of risks that test the resilience of corporate values, strategies, operations, and enterprise risk management frameworks. Tightening monetary policies, deepening geopolitical tensions, widening domestic political polarization, labor shortages, severe weather events, growing challenges tied to biodiversity loss, and the uncertainties surrounding generative AI are among the varied risks that companies have had to contend with over the past year.
Looking to the year ahead, these risks are likely to persist and even intensify—against the backdrop of an election year in the United States, ongoing war in Ukraine, and China’s sluggish post-pandemic recovery. Severe wildfires, heatwaves and flooding across the globe, rising insurance costs, and the exodus of insurers from certain regions underscore the burgeoning financial challenges of climate risks. Cybersecurity risk is bound to increase while the geopolitical rivalry…
