The mention of terms in 10-K filings associated with public policy risk, IE regulation has increased by 27% in the last decade, according to a report by the US Chamber of Commerce. The Chamber states that changes in taxes, regulations, and enforcement have increased dramatically in the last ten years.
US Chamber Executive Vice President and Chief Policy Officer Neil Bradley, said that companies of all sizes face increasing headwinds from Washington, and the risks are increasing.
“This report confirms what we have been hearing from our member companies about the growing threat of government overreach and the risk it poses to their businesses.”
The Chamber report points to the increasing frequency of Executive Actions taking the place of legislation and the polarization of Congress as a big problem.
The report shares:
“When former President Trump took office, he reversed course and overturned nearly 200 regulatory actions from the Obama administration in areas like environmental policy, labor, and immigration. Former President Trump also pursued his own regulatory agenda, especially in immigration, environmental, and energy policy, which, in turn, were quickly reversed once President Biden took office.”
This yo-yo effect makes it difficult for businesses to adapt and prepare as consistency is tossed out of the window. These major regulatory changes increase public policy risk for all companies – not just public firms.
Suzanne P. Clark, President and CEO of the US Chamber of Commerce, said:
“The data show what business leaders tell us every day—rising public policy risks threaten business growth and innovation and our country’s global competitiveness,”
Clark visited with CNBC this morning, where she mentioned the SEC specifically and its aggressive rule-making, including the looming cost of the Commission’s push into ESG disclosure that will bring an unknown cost to public firms. Clark noted that SEC Chairman Gary Gensler has put forward 2x as many rules in half the amount of time as his predecessor. Clark said that climate disclosure, something the SEC is ready to require, will cost public forms more than two and half times all the current disclosure required.
The Chamber recently reported that just one in five small business owners believe the US economy is in good health, down from 27% saying the same last quarter.
The House Financial Services Committee has scheduled a hearing on the oversight of the Securities and Exchange Commission (SEC). The hearing is scheduled to take place at 10 AM on Tuesday, April 18th.
Looking forward to joining @SquawkStreet at 10:45 today to discuss:
– The debt ceiling
– Rising public policy risk
– SEC Chair Gary Gensler’s Capitol Hill testimony tomorrow
— Suzanne Clark (@SuzanneUSCC) April 17, 2023