Periodically we’ll be interviewing Senior CEME Fellows to check in on their latest research, big questions they’ve been pondering and everything they’re keeping an eye on in the world. Today we spoke with the Co-Head of SovereigNET and Managing Director at K&L Gates, Thomas Holt.
Interviewer: What are the questions that keep you up at night around your current research/focus of interest?
TH: In my professional life as the Managing Director of a global law firm I am constantly working with clients trying to deal with issues surrounding global regulatory regimes (e.g. US Foreign Corrupt Practices Act). This is especially important for financial institutions who are having to change the way they conduct risk management. Traditional risk management was about business drivers (e.g. interest coverage ratios) but now they are increasingly about politics. What concerns me is that these firms are subject to geopolitical concerns that have negative externalities on them.
Interviewer: What do you see in the developments and events around the world today that make your work relevant and timely?
TH: As a result of the 2007-2008 Financial Crisis there have been a lot of regulatory changes. For example, decisions to increase a global tax system to combat tax base erosion affect global firms’ operations and investments. This has made it critical to understand the sensitivities for all parties involved when dealing with global stakeholders, such as multinational firms and countries. As a partner in global law firm must be mindful of global changes that can affect clients and these are going into a broader array of issues. This means we need to have professionals that have experience in politics and policy issues in every country our clients do business — this is very new! And the pace of regulatory requirements is growing exponentially within the last 3-4 years. Prudent global managers will not be able to decouple business matters from politics, or they do so at their own peril.
Interviewer: Where do you see the greatest opportunities for impact for students who affiliate or work with IBGC?
TH: My education at The Fletcher School provided me with a sensitivity to policy issues that is increasingly relevant to risk assessment for corporate decision-making and investing. The IBGC program is uniquely designed to ensure that our students have the substantive training in economics and quantitative analysis, but the program also provides an emphasis on the geopolitical issues that now trump traditional business analysis. Through the IBGC students have the chance to engage global practitioners like myself for career advice and research, either their own or that of CEME fellows.