Welcome to the Boardroom Governance Podcast. I’m your host, Evan Epstein. In this episode, I talk with Mario Mancuso, a partner at Kirkland & Ellis where he leads the Firm’s International Trade and National Security practice. Prior to private practice, Mario held several positions in the U.S. Government, including as U.S. Under Secretary of Commerce, Industry and Security; Deputy Assistant Secretary of Defense, Special Operations and Combating Terrorism; Special Counsel, Office of the U.S. Secretary of Defense; and Board Member of the CFIUS Advisory Board, U.S. National Intelligence Council. Prior to his presidential service, he was in private law practice and served as a forward deployed military officer during combat operations. In this podcast, we talk about geopolitics, strategy and national security in the context of corporate governance. Specifically, we address the origin, evolution and impact of CFIUS (the Committee on Foreign Investment in the United States) and the potential introduction of new regulation related to outbound investments. We also discuss industrial policies by China and the U.S. and the international decoupling of economies and supply chains, and how should boards address these risks and opportunities. If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. You can find all the show notes on the website boardroom-governance.com and please feel free to subscribe to the Boardroom Governance Newsletter at evanepstein.substack.com
0:00 -- Intro.
1:42 -- Start of interview.
3:31 -- Mario's "origin story".
9:25 -- The origin, evolution and impact of CFIUS. "The (regulatory) process is the bottle, national security is the wine." The driver of CFIUS is national security.
13:11 -- On the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).
18:18 -- His recommendation on how boards should think about CFIUS matters. His book: "A Dealmaker’s Guide to CFIUS: Answers to Common Questions from Boards, Bankers and Investors."
21:40 -- On the new CFIUS Enforcement Guidelines (Fall 2022). "Since FIRRMA, CFIUS has been significantly resourced by the U.S. Government and today there is an independent office within CFIUS that is entirely focused on transactions that were not notified to the Committee." (see CFIUS annual reports to Congress). There are hundreds of transactions reported per year at this stage.
25:58 -- The proposed outbound investment screening regulatory framework. "[It may impact] a U.S. person sitting in a Chinese board (for example)." "The U.S. has jurisdiction over U.S. capital, U.S. persons, U.S. technology, etc and the U.S. wants to slow down adversary countries." "We will know a lot more about this framework by the end of February 2023 when the report comes out."
29:47 -- On the different approaches to industrial policies by China and the U.S. The Chips and Science Act and IRA Act of 2022.
36:36 -- On how boards should consider geopolitical risks and opportunities ("how to optimize outcomes"): Three questions to consider: 1) The U.S.- China relationship, 2) What the US is doing with its allies / What China is doing with its allies, and 3) What are national governments doing to independently enhance their own sovereignty and security resilience.
39:17 -- On US jurisdiction over U.S. foreign-listed companies. Example of Canada ordering divestment from Chinese investments in Canadian lithium companies.
43:30 -- Final thoughts for directors on geopolitics and national security issues.
44:24 - The books that have greatly influenced his life:
45:56 - His mentors, and what he learned from them.
48:20 - Quotes he thinks of often or live his life by. From his mother "This is the day the Lord has made; let us rejoice.” (psalms)
49:05 - An unusual habit or an absurd thing that he loves: early rising and journaling at a coffee shop or diner.
50:06 - The living person he most admires: his dad.
Mario Mancuso is a Partner of Kirkland & Ellis and leads the firm’s international trade and national security practice. A former senior member of the President’s national security team, Mario provides strategic and legal advice to companies, private equity sponsors, and financial institutions operating or investing across international borders.
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You can follow Mario on social media at:
Twitter: @MancusoOnline
LinkedIn: https://www.linkedin.com/in/mariomancuso/
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You can follow Evan on social media at:
Twitter: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License