M&A and Corporate Governance in an Age of Volatility, Politics, and Power

A review of the Conference on M&A and Corporate Governance*, held on 21 November 2025 at the Columbia University in New York, and organised by Columbia Law School’s Millstein Center and the Center on Corporate Governance, Paul Hastings, Wachtell, Lipton, Rosen & Katz, and Gladstone Place Partners.

Few recent periods have tested corporate dealmaking as persistently as the current one. As volatility has become structural rather than cyclical, the Conference on M&A and Corporate Governance highlighted how governance frameworks are being stretched to accommodate uncertainty, discretion, and speed.

The ▶️ Opening Address described an unusually erratic M&A environment. Early 2025 optimism about easing regulatory barriers gave way to a weak first quarter amid political turbulence, followed by a rapid rebound in May. This “double pivot” lifted overall volumes while pushing deal counts to historic lows, concentrating value in a small number of very large transactions. At the same time, M&A activity has declined relative to global market capitalisation, signalling a shift toward fewer but more consequential deals.

Boards have responded with adaptation rather than retreat. After successive shocks—from the pandemic and geopolitical instability to inflation and higher interest rates—executives have come to treat disruption as a persistent condition. Easing monetary policy, stronger equity markets, renewed IPO activity, and the growing role of artificial intelligence across sectors have reinforced deal momentum.

The opening remarks also highlighted a new governance tension created by the U.S. government’s growing role as an equity holder, raising difficult questions about how boards document politically sensitive decision-making while discharging fiduciary duties

Panel I – Current Antitrust Policy and Enforcement

The ▶️ first panel examined a persistent puzzle in merger control: while enforcement rhetoric appears to swing sharply with political change, outcomes have remained more stable than headlines suggest. The discussion emphasised that the core architecture of U.S. merger control has endured across administrations. What has shifted is not the law itself, but how agencies understand their role—either as strict enforcers or as regulators willing to negotiate outcomes.

Despite expectations of rollback, key Biden-era initiatives remain firmly in place. The 2023 Merger Guidelines continue to be cited in agency complaints and upheld by courts, and the revamped Hart-Scott-Rodino filing form—the first major update in decades—has survived and is being actively defended. Their significance is primarily operational rather than symbolic: they front-load information, expand scrutiny of deal rationales and labour effects, and increase the cost and intensity of review.

The most visible change has been in the treatment of remedies. Where earlier leadership viewed negotiated settlements, particularly behavioural remedies, with scepticism and favoured litigation as a deterrent strategy, the current approach has shown greater openness to both structural and behavioural fixes, alongside a renewed willingness to grant early termination when concerns are resolved.

Underlying these shifts is a philosophical divide. A law-enforcement model treats merger control primarily as deterrence, while a regulatory model assumes agencies will work with parties to reshape transactions, even at later stages. That distinction has become more consequential as courts increasingly expect agencies to engage seriously with proposed remedies, narrowing the scope for outright prohibition once negotiations are underway.

From a practitioner perspective, however, enforcement has been less volatile than public debate implies. Review has become slower and more demanding, but outcomes remain broadly consistent. Much of antitrust’s impact continues to occur quietly, as deals are abandoned, restructured, or never proposed because firms correctly anticipate regulatory risk.

Panel II – M&A and Politics

The ▶️ second panel considered whether the growing politicisation of M&A is a temporary distortion or a durable shift. The discussion pointed firmly toward the latter. While individual leaders change, the forces now entangling politics and dealmaking—populism, national security, industrial policy, and institutional fragility—are likely to persist.

Most transactions still proceed through conventional regulatory channels. But once a deal reaches a certain scale or visibility, political engagement becomes unavoidable and legal review increasingly runs alongside political bargaining. Dealmakers must now consider not only antitrust risk but broader political strategy, including the need for a coherent “White House strategy,” drawing in actors ranging from CFIUS and sectoral regulators to state attorneys general and public opinion.

Rather than treating this dynamic as personality-driven, the panel framed it as an intensification of longer-running populist pressures. Across jurisdictions, populism tends to converge on three fault lines relevant to M&A: hostility to foreign ownership perceived to threaten jobs, suspicion of corporate size and concentration, and resistance to rapid economic change. These pressures help explain why transactions involving strategic industries or emerging technologies attract disproportionate scrutiny.

National security has become the most powerful channel for political intervention. Expanded foreign investment screening regimes—particularly in the United States following the post-2018 expansion of CFIUS—have increased discretion and opacity, making it harder for outsiders to distinguish principled enforcement from political intervention.

From a practical perspective, political engagement is now embedded in deal planning for large transactions. Some firms appear willing to treat political concessions as part of deal execution, preferring discretionary negotiation to a predictably hostile but rule-bound environment. The panel cautioned, however, that once politics becomes an accepted price-setting mechanism, future administrations inherit both the expectations and the tools created by their predecessors.

Panel III – AI and M&A

The ▶️ third panel explored how artificial intelligence is reshaping M&A not only through strategy and valuation, but through the mechanics of legal and advisory work. 

Strategically, AI is now a routine part of acquisition logic across industries. Firms assess whether AI adoption accelerates growth, improves margins, or creates durable advantage. At the same time, the panel stressed that AI is not uniformly beneficial. In some sectors it enhances value; in others it threatens existing business models, increasing valuation uncertainty.

This uncertainty is most visible in the pricing of AI companies themselves. Venture funding has poured into loss-making firms valued on expectations of future dominance. For strategic acquirers, this creates tension. Unlike venture funds, corporate buyers cannot rely on portfolio logic. As a result, many firms prefer minority investments or corporate venture capital structures that preserve optionality while limiting valuation risk.

The discussion also examined “circular” deals in which firms act simultaneously as investors, customers, and infrastructure providers. While such reciprocity is not new, its scale in AI markets is unprecedented. Panelists disagreed on whether current valuations assume implausibly large productivity gains or reflect genuinely different economic dynamics driven by incumbent demand.

Beyond deal strategy, AI is already transforming legal practice. Tools for document review, due diligence, and contract analysis offer speed and scale, but speakers cautioned against extending them to high-stakes reasoning or drafting. Confident-sounding outputs can obscure omissions, raising the risk of false negatives in diligence.

These changes also affect professional training. As AI compresses traditional apprenticeship tasks, the value of legal work increasingly lies in interpreting outputs and exercising judgment, rather than in producing information itself.

Panel IV – Delaware's Recently-Enacted SB 21

The ▶️ fourth panel turned to Delaware’s SB 21, treating it not as a doctrinal revolution but as a revealing moment in the state’s corporate law trajectory. Introduced as a clarifying safe harbour for conflicted transactions, SB 21 reallocates responsibility among courts, boards, shareholders, and legislators at a time of growing pressure on Delaware’s franchise.

At the statutory level, SB 21 expands reliance on director approval by importing stock-exchange independence standards and attaching strong presumptions to board-designated independents. It relaxes committee requirements and softens stockholder-approval standards, leaving key concepts—such as what constitutes “informed” approval—less clearly specified.

Critics argued that these changes lower procedural demands while reducing the role of shareholder litigation in enforcing fiduciary norms. Others countered that Delaware judges retain discretion and that equity remains intact outside the statute’s safe harbour.

The debate sharpened around controlling stockholders. SB 21 introduces a statutory definition that some interpret as imposing a hard voting-power threshold, potentially excluding “de facto” controllers from heightened review. Whether the statute functions as a true safe harbour or narrows fiduciary scrutiny more categorically remains contested.

The panel also highlighted the statute’s origins. SB 21 was drafted quickly amid threats of reincorporation by controlled companies. Whether those threats were economically credible mattered less than the fact that they were taken seriously. The episode illustrates how charter mobility can operate as a bargaining tool.

SB 21 thus marks not an endpoint but an inflection point—revealing both Delaware’s responsiveness and its exposure to future pressure.

Closing Reflections – Quiet Power in Corporate Control

The ▶️ conference closed by highlighting activist hedge funds, proxy voting, and emerging regulatory ideas. While activism influences M&A, its scale is often more constrained than public narratives suggest. The activist universe is small and highly concentrated, with only a handful of funds capable of sustained campaigns.

Proxy contest data reinforce this restraint. Management usually prevails, activists rarely win full slates, and most campaigns settle privately. The voting behaviour of large asset managers is strikingly consistent, closely tracking proxy advisor recommendations.

The discussion ended with unresolved questions around proxy advisors, mirrored voting, and where effective control ultimately resides when large share blocks remain passive. The broader message echoed the conference as a whole: power in corporate governance is exercised less through dramatic interventions than through quiet, structural constraints shaping what boards, investors, and regulators consider possible.

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*The programme included a lunch and fireside chat with Justice Abigail M. LeGrow of the Delaware Supreme Court, moderated by Professor Eric Talley.

The ECGI does not, consistent with its constitutional purpose, have a view or opinion. If you wish to respond to this article, you can submit a blog article or 'letter to the editor' by clicking here.