Corporate Risk Radar podcast series: US/LatAm | Episode 2 | Amid the risks comes opportunity in US and LATAM
Podcast 14 November 2023 14 November 2023
Corporate Risk Radar
In the second episode of the Corporate Risk Radar Podcast Series, host Eva Maria Barbosa explores the findings of Clyde & Co’s Corporate Risk Radar research in the US and LATAM risk landscape. She is joined by Marc Voses, Partner in the New York City office, a seasoned advisor to insurance businesses, along with Franco Acchiardo, Managing Partner of Clyde & Co’s Santiago office, who also leads the Corporate and M&A practice in Chile.
In the second episode of the Corporate Risk Radar Podcast Series, host Eva Maria Barbosa explores the findings of Clyde & Co’s Corporate Risk Radar research in the US and LATAM risk landscape. She is joined by Marc Voses, Partner in the New York City office, a seasoned advisor to insurance businesses, along with Franco Acchiardo, Managing Partner of Clyde & Co’s Santiago office, who leads the Corporate and M&A practice in Chile.
Barbosa begins the episode with a brief overview of the research, which finds that amongst business leaders in the US and LATAM, short-term economic concerns are overtaking longer term priorities, such as people development and ESG. Voses and Acchiardo each outline the economic landscape in their regions, including how businesses are responding and the continued opportunities for growth in M&A activity. This is followed by a discussion of key ESG issues such as climate change and white-collar crime, analysing the risks to businesses, and the evolving regulatory landscape.
Providing a snapshot of the economic outlook in the US, Voses says the country “is facing an uphill battle over the next year” due to high interest rates, high inflation, political risks, and the uncertainty of 2024 US elections. However, he believes continued high employment is encouraging and that opportunities remain, saying: “Short term risk, short term pain, but in the long term, growth and lots of opportunity.” Acchiardo is more cautious with his optimism for “LATAM, where challenges are “the same but different”, with steady employment combined with a growing shortage of opportunities for those seeking work.
In the US, Voses says current economic conditions bring opportunities for M&A, with the “boomer generation retiring” and businesses coming up for sale that could be long-term growth prospects. The strong dollar means that foreign investors are looking to the US for M&A opportunities, although on the flipside, US businesses will see their global revenues fall for the same reason.
Given their reliance on natural resources and port activity, which is under threat from rising sea levels, Acchiardo says that climate change risks are “a central point in the concerns of board members in Latin America.” Pressure is growing from regulators and shareholders and it’s a similar situation in the US, where Voses says climate change “is quickly becoming evident to anyone that was a doubter.” But, while widespread impacts are concerning, he believes “we have the scientific and the economic ability to make change.”
A final regulatory risk for discussion, the white-collar crime act passed in Chile on 17th August 2023, taking the country from “an era of compliance 1.0 to an era of compliance 2.0”, according to Acchiardo. He advises board members to carry out a review of their crime prevention models before the law is enacted on September 1st next year.
To conclude, both guests remain cautiously optimistic. Voses reinforces his belief that there are opportunities to raise funding, develop new technologies and explore M&A, while Acchiardo stresses that “cash is king” and businesses with access to capital should maximise their purchasing power. Finally, Acchiardo warns businesses to “anticipate and mitigate risk,” utilising insurance where possible, and acting before it’s too late.