Yes, business prefers certainty, so the fast implementation of a myriad of new rules of any kind poses an especially difficult challenge for companies. This is all the more true when the changes apply to things like the international supply chain due to rapidly shifting trade policy.

Forecasting becomes more difficult in a volatile and uncertain environment.

This puts management and boards in a tough position. On the one hand, with few exceptions in corporate America, public companies are in the business of providing earnings guidance.

Earlier this year, we saw various reactions from public companies most impacted by rapid changes in trade policy, including things like withdrawing guidance and even providing dual-scenario guidance.

On the other hand, perhaps worse than giving no guidance is missing guidance. The latter is often a key element of a challenging securities class action fraud suit.

But . . . the toughest risk to recover from is the one that you don’t see coming. The guidance risk is a clear and present danger, one that can be handled by taking a thoughtful approach.

Seasoned management and boards will remember lessons learned from past moments of volatility, including most recently, the COVID-19 pandemic. That experience, coupled with getting solid advice not just from outside corporate counsel but also from outside litigation counsel, will help companies handle the challenge well.

*The famous Van Gorkum case concerning an M&A deal in 1980.