Kamala Harris and corporate governance

Kamala Harris looks set to be the US Democratic Party’s new nominee for President of the United States, but what are her positions on corporate governance matters?

The California-born attorney, politician and current Vice President was already in the minds of political pundits as uncertainty engulfed Joe Biden’s reelection campaign. Now that Biden is out, Democrats have quickly rallied around her with steadfast support. 

There’s still a long way to go until the US election in November, but if Kamala Harris were to win, what would her impact—if any—be on American corporate governance?

Kamala Harris has a background in law, not business. Her political positions have seldom specifically targeted America’s vast corporate engine. That said, she has engaged with many companies in her career as an attorney and has built an experience of knowing when, where and how the law applies to the corporate world. 

From this, we can expect her policies to significantly impact governance if she is elected. 

Here are where those main impacts will be felt:

It makes perfect sense to start here because a Kamala Harris presidency would answer one of the biggest questions plaguing American governance for years: what is the future of ESG in the United States?

Unlike the rest of the world, ESG has become caught in the polarised tug-of-war between the left and right. 

Critics in other jurisdictions might simply call for ESG to be watered down; in America, critics want it confined to history. Vocal opponents include popular 2024 Republican Presidential Nominee Vivek Ramaswamy, Florida Governor Ron DeSantis and Texas Governor Gregg Abbott. The latter two have overseen legal efforts to outlaw ESG investing in their states wherever possible. 

If November’s election produced a Republican Congress and a Donald Trump presidency, ESG would be under serious threat in the US (in principle, if not in practice, as billions continue to flow into ESG assets, despite the criticism). 

If Kamala Harris wins the presidency, ESG’s political future looks markedly different. 

Harris has regularly voiced support for green, sustainable energy and a move away from fossil fuels. As an attorney, she has fought—and sometimes won—significant legal cases against fossil fuel giants like Chevron and BP. 

Harris has also co-sponsored the Green New Deal, a non-binding resolution that committed the US to renewable energy and net-zero emissions. 

All of this suggests one crucial thing: if the US anti-ESG movement grew to a point where a bill to outlaw ESG investing arrived at a Harris White House for signature, it would be met with a veto or at least tough negotiations leading to watered-down compromise.

In the US, corporate governance regulations are numerous and highly centralised nationally. Despite that, critics – often on the right – call for laws to be loosened in the name of free enterprise. 

Harris, who has a history of taking on big businesses in the courtroom, would most certainly maintain government support for more business regulation. Given the nature of her past court cases against banks and other financial institutions, her biggest motivations are consumer protection and business ethics, something that has resonated more with boards in recent years through increased focus on “stakeholder capitalism.” 

Harris has also supported the landmark Dodd-Frank Act, which significantly strengthened US banking regulations following the Great Recession.

DEI is a hot topic in American politics. One side considers it necessary to achieve proper representation in American society; the other believes it is discriminatory. 

A pivotal 2023 Supreme Court case held that race-based affirmative action policies in universities violated the US Constitution. It left many businesses in limbo about whether such a ruling would apply to the corporate world someday too. 

Harris has vocally defended DEI. As recently as April 2024, she embarked on a “Nationwide Equity Tour” in Atlanta, saying then that “you can’t truly invest in the strength of our nation if you don’t pay attention to diversity, equity, and inclusion.”

If Harris won, her policies on DEI would undoubtedly be shaped by the politics around her. Would she have enough support in the House, Senate, and nationally to advance her priorities? Only November will tell. 

Given her vocal support of social justice, green policies, and holding big companies accountable, we can expect a Harris win to throw weight behind further governance regulation and the advancement of ESG initiatives. 

However, that’s if she wins. There’s a long time to go before the US Presidential election, and a lot can happen in the 100 days remaining in the campaign.