Geopolitical Changes and Corporate Law
- Klaus Ilmonen
- 30.10.
- 2 min käytetty lukemiseen
Päivitetty: 3 päivää sitten
How Have Geopolitical Changes Affected Corporate Law?
New research published in the Brill Journal of Law & Geoeconomics (2025)
Corporate law is changing; from a focus on managing agency relationships and corporate performance, corporate law is being used as a tool to promote strategic state interests in a fractured world order.
Geopolitical developments have driven an increase in security-related policies that directly affect corporations and private business in the EU and elsewhere. The EU is, for example, introducing new FDI regulation and proposing new export controls. The EU has also set new requirements for critical entities to strengthen continuity planning and resilience to external disturbances in the CER Directive. Similar developments have occurred in other regions as well – including US CFIUS regulation and restrictions on US investments in China, for example.
Private corporations own and operate infrastructure critical to modern societies – from telecommunications to financial services and healthcare. In many cases, corporations contribute directly to state security. Production and supply chains have increasingly created economic interdependencies that can be “weaponised” for strategic purposes. As the geopolitical environment has deteriorated, state intervention in corporate enterprise has changed from facilitating open market access to ensuring national economic security. States aim to mobilise corporate enterprise to contribute to strategic state interests, including defence and security of supply. States can be expected to take strong measures to ensure that businesses do not compromise national security.
These developments profoundly affect regulatory and corporate law in the EU and elsewhere. The EU has pursued a whole-of-government approach where corporate regulation and corporate law are seen as parts of a broader policy toolbox to mobilise corporations in pursuing strategic state interests. The role of corporate law has expanded towards addressing broader societal concerns, including state security, reflecting the evolving role of corporations in society and the new geopolitical landscape.
Corporations must navigate a new geopolitical landscape and a demanding regulatory environment. Corporations are increasingly accountable for how their operations affect society and politics and must respond to shifting political realities – as was seen, for example, when hundreds of corporations withdrew from Russia after the Russian war of aggression against Ukraine started in 2022. At the same time, states will look to create opportunities for corporations that strengthen economic security and strategic autonomy. Increasingly, corporations must incorporate political considerations in their decision-making. In the current environment, corporations can no longer remain neutral. Instead they must respond to the political needs of their stakeholders.
A link to article in the Brill Journal of Law and Economics (2/2025) can be found here:
A link to a first draft manuscript is available below:
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