One of the principal things a new administration is going to have to address in the area of corporate law is how to encourage business managers to properly assess the long-term risks facing their businesses, and to manage those risks so that their businesses are sustainable in the long-term.  The need for U.S. businesses, on which Americans rely for jobs as well as many basic goods and services (such as banking and insurance), to appreciate and guard against the long-term risks associated with their business activities should be evident from the current financial crisis, which stemmed in large part from financial institutions’ failure to appreciate and guard against the risks associated with the complex mortgage-backed securities and derivative instruments they held and the inevitable bursting of the housing bubble.  As a consequence, Americans not only worry that their investments (including retirement and life savings accounts) held by these financial institutions might be at risk, but they also question the long-term stability of the U.S. economy.

So what should a new administration do to make businesses better appreciate, and protect themselves from, the long-term risks associated with their businesses?