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Boardrooms brace for new governance challenges as 2024 populist politics impact on global elections.

2024 might end up being one of the most consequential political years of this century. 

By Charles Dane, Policy and Government Relations Advisor, Governance Institute

2024 might end up being one of the most consequential political years of this century. 

Rarely have we seen such overwhelming global political uncertainty on foot at the same time. So far, and to name only a few, we have watched India, Pakistan, Indonesia, South Africa, the European Union (EU), Mexico and closer to home, Tasmania all go to the polls.  

Soon, we will have the UK, France and eventually the US pick their next leader, with the ACT, NT and Queensland having elections too. Even for a political junkie it is exhausting, and that’s while ignoring the whispers of an early Australian Federal Election that get louder every week.  

Amid all the uncertainty, what is clear is that 2024 will see more than just the usual partisan shuffling of the political deck. The ramifications to the global status quo will be felt far beyond this year and will set the stage for a potentially historic shift in how nations do or don’t cooperate to uphold democratic values and strengthen governance standards. 

The prevailing narrative hinges on whether the world’s democracies can transcend internal contradictions and conflicts, and present a united front defending an open, rules-based international system. At stake are the governance standards that underpin political pluralism, human rights, economic integration and collective security for decades to come. These standards are rarely bound by nations’ borders.  

For multinationals, the fragmentation or consolidation of global governance regimes will determine the rules, requirements and risks they face. Issues like data privacy, supply chain due diligence, anti-corruption enforcement and environmental standards could diverge or re-align across major markets.  

As our government in Australia seeks to reform its long overdue privacy and climate reporting laws, we will have little success if global partners fail to act.  

In the United States, the divided legislature raises questions about the prospects for international agreements on digital taxation, competition policy and cross-border data transfers. The continuation of these legislative stalemates could further fragment governance standards and compliance obligations between America and partners like Australia and the EU. 

Within the EU itself, elections took place last week resulting in the centrist EU Institutionalists maintaining their majority, but with significant gains by far-right political parties, a ballot that is oft exercised in EU elections as a political message cudgel against their own Governments.  

However, these lingering populist insurgencies could demand economic protectionism and nationalistic carve-outs to weaken the collective influence of the EU.  

If this trend continues with the remaining elections this year, it will increase existing uncertainty for businesses, as companies are forced to weigh geopolitical risks, disparate regulatory regimes and contrasting models of economic and environmental governance in an increasingly divergent world order. 

Boards who struggle with this uncertainty, oversee unsustainable practices, ignore human rights and arbitrage regulatory regimes may find themselves vulnerable to mounting pressures by a more aggressive activist class.  

Make no mistake, any political shockwaves of 2024 will manifest themselves in boardrooms. Decisions at board level are taking on greater public prominence as the populist political momentum makes itself felt in the corporate world. Good governance standards and processes need to support these decisions.  

The interconnected nature of global capitalism means corporations have an existential stake in whether the current trends of nationalism, populism and authoritarianism imperil the open, market-based democratic order, or reinvigorate it. 

Q&A with Governance Institute

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