Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. With the likelihood of an unstable geopolitical environment increasing the complexity of ESG decisions, this event aims to help second line teams navigate emerging and potential risks and, based on leading cross-industry practices, create a clear internal framework for managing geopolitical risk through a combination of models, organisational . by
Questions to ask about key business risks arising from geopolitical and related crises Strategic, operational, financial and compliance risks are common level-one risk categories that board members and management need to consider. The value of being able to anticipate, synthesize, and harness risk for potential gain has never been greater. As geopolitical events can influence market conditions in industrialized countries just as much as they can impact developing countries, assessing and understanding them through the conduct of an effective geopolitical risk assessment will help mitigate risk exposure. Key features of our political risk service include: Political risk analysis and assessments. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Systemic-risk managers adopt a primarily defensive position, focusing on protecting their businesses from the downsides of change. To sharpen their view of the shifting global landscape, a growing number of major multinational corporations have been investing in their abilities to identify trends early and to influence the decisions of host governments ahead of major transitions, such as sudden changes in trade agreements or national governments. We provide geopolitical risk consulting and advisory services and solutions that are timely, market-relevant and forward-looking. Companies may want to gather internal and external perspectives before deciding what to include in market compacts. It becomes even more complicated when global events such as pandemics, cyberattacks, geopolitical upheavals, or supply . Leveraging Our Expertise to Navigate Geopolitical Risk. Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Stratfor Worldview is the world's leading geopolitical intelligence platform. Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. trust us to help them make informed decisions, Professional services }, Independent benchmark for external risk exposure to identify, evaluate and monitor of risk exposure with expert insight on the external facing operational and strategic risks. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. Geopolitics, corporate governance and ESG. Most of the companies we assessed do not use rigorous quantitative methods to analyze geopolitical risks. Some of these political consulting clients include: Airbnb. Integrate geopolitical signals and risk assessment into strategic-planning processes and define actionable strategies to both protect the business and take advantage of emerging opportunities. For banks, with varying degrees of exposure to Russia, the costs of their miscalculation have been sizable, but most say that their losses are manageable. They may have to balance, given the risks, near- and long-term market priorities. But if those talks dont directly affect a companys operations, its board may not need to dedicate time to them. & account inquiries, For CA: Do not sell my personal information. Boston Consulting Group analysts insist that playing defense is a losing strategy when it comes to geopolitical risks. . Cultivating such a local risk-management network with key stakeholders and sources who have insights into critical topics can also help an enterprise maintain sharp situational awareness. People may worry that a company will hold itself to different standards in different regions. Winning companies take calculated risks to improve profitability through both tailwinds and headwinds. Thank you! However, it added, "only a subset of chief risk officers (CROs) recognize this." Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. Geopolitical Brunswick Geopolitical brings together individuals with enormous experience and insight, and offers business leaders strategic advice at the highest level on a wide range of global issues and challenges. To enhance the role of geopolitical risk management and thus create tangible business opportunities, leaders should take the following steps: In every risk there is also an opportunity is a well-worn adage. We are constantly searching for overlooked assets where we can navigate the risk, while others are unwilling or unable to, an executive of a private-equity firm with a decades-long record of success in emerging markets told us. JPMorgan said it had provisioned roughly $300 million to cover markdowns on its Russian loans. for political and security risk firms that sell their services or analysis to client companies (e.g. 2. International Trade, Site by Odgis+Co and ICVM Group. Instead, boards can dedicate regular standing time to analyzing how to respond to the geopolitical risks that their enterprises face as part of a broader board effort to build more resilient companies. Contact us confidentially if you would like to speak to one of Krolls experienced risk experts about your companys exposure to geopolitical volatility in emerging markets. For decades, companies built their . your toughest business challenges, Government professionals Create a system for collecting, processing, and disseminating risk signals with a variety of time horizons or purposes across the organization, supplemented by input from external agencies and advisors. legal content, expertise, and technology, Find essential resources . Trade Wars and a Stronger Europe. Operations in countries with poor human rights records can cause supply chain disruptions but can also lead to reputational damage and give rise to class action lawsuits, public boycotts or stockholder divestment campaigns. Andrew S. Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, New York, NY: Currency, 1996. Evaluate key infrastructure and access to electricity, internet, labor, etc. One stream is to work for consultancies - i.e. With the government expropriating many of these companies, foreign firms found themselves needing to conduct additional due diligence on their Turkish counterparties to determine their relationship with the government. <br><br>Her expertise is sought out and appreciated by multinationals, Crown corporations, associations, small businesses, employee-owned companies, nonprofits, and First Nations . For many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. Such a test would include a time frame for execution and possible technical options. "speed": 600,
New York NY 10055. Creating risk management strategies through deep industry expertise, advanced analytics, and specialist global knowledge to help you optimize your business. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. Any discussion of such potentially existential issues must start at the top. Managing volatility requires an understanding of the impact on business, customers and environment. Our Asia-Pacific footprint is now a huge advantage.. Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. accounting technology, guidance, and expertise, Let us help you solve High levels of corruption among lawmakers can make securing the necessary licenses, permits and registrations an arduous process, especially whilst also staying in compliance with wide-reaching laws like the U.S. FCPA. and risk management resources for todays professional services Our . Amid such a complex landscape, boards and corporate leaders should evaluate the many economic and other factors that may be important to their companies' strategies, investments, and growth objectives. (See Exhibit 2.). 1. Country risk mapping. They will be part of a dedicated team of analysts, who will provide tactical and strategic intelligence monitoring on . Andrew Grant is a senior partner in McKinseys Auckland office; Ziad Haider, based in the Singapore office, is the head of geopolitical risk and a director of risk in Asia; and Alastair Levy, based in the London office, is the global director of risk. Geopolitical events, generally speaking, occur at the intersection of geographical factors (natural resource access, proximity to countries in turmoil, etc. Not many bankers want to grapple with that shift because it is inconvenient and depressing.. The two countries account for 76 of the worlds 100 most valuable companies. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. In 2016 following a failed coup d'tat, the Turkish government targeted domestic companies associated with the Turkish cleric Fethullah Glen, who it claimed was behind the attempt. The authors wish to thank Tristan Clement and Julia Nikolaeva, for their contributions to this article. As a management consultant, Dr. Smith has worked for PA Consulting Group . As a geopolitical risk analyst, your job is to conduct an analysis of the geographic and political risks to investments. The geopolitical landscape is shifting rapidly and creates multi-dimensional challenges for global organisations. 1
Yet few companies consistently act on it. Theyre the industrial goods companies that shift production from one country to another because they correctly predict that rising protectionist sentiment in some key markets will lead to trade actions that will alter the economics of manufacturing. The Position . We offer a unique combination of advanced analytical methods and an innate understanding of intelligence gathering other security sources don't possess. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. Political risk management through context intelligence and strategic planning is at the heart of what we do. 3. Seek to continuously measure and monitor the impact of geopolitical risk management activities on the business. Convert risk into opportunity with bespoke solutions. 4
oil companies, airlines, tech firms ,etc.). 3 Commodity prices rose sharply 4 after Russia . Derek Leatherdale and Hanif Barma from the Risk Coalition identify in this article the key things that any board or risk committee should consider in the context of the complex and volatile geopolitical environment in which business now operates. Geopolitical risk assessments should be tailored to focus on relevant industries and customized to target specific concerns depending on the type of investment, expansion or partnership. Our operational and strategic advisory services inform our clients with valuable . Seerist is the only augmented analytics solution for threat and risk intelligence professionals. Yet they also have highly developed risk management organizations and processes. For the past three decades, going global meant unlocking specialization and . Taking a bionic approach to digital transformation can lead to successful business outcomes. Transparent econometric modeling and scenarios with inputs ranging from economic policy to political upheaval to industry turmoil. Forecasting government action and decisions. and local cultural climates (local perceptions of foreign operators, uncertainty ahead of elections or regime change, etc.). Providing a regular forum for a board to examine pressure points and operating realities from multiple perspectives and air diverging views doesnt just improve decision making and establish an organizations appetite for riskit helps create consensus across leadership on the issues of the day. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway,
These circumstances can leave traditional risk management systems and teams flatfooted. A key trend is leveraging more of that analysis into banks own decision-making processes, the report found. We grouped companies into four general archetypes according to the extent to which they recognize and act on opportunities arising from geopolitical shiftsin addition to mitigating the downside risksand the intensity of focus and sophistication of processes with their organizations. According to the report, no single locale is likely to dominate all regions or domains, and a broader range of actors will compete to advance their ideologies, goals, and interests.. This website uses cookies. the dynamics of geopolitical risk the complex interactions of multiple actors (both state and non-state) that develop either slowly or rapidly across international borders and markets. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . American Express. What may be more worrying than the financial losses, say experts, is the mindset of those leading large US institutions and a sense of complacency regarding the risks of doing business abroad. By closely monitoring growing public support for greenhouse gas mitigation measures in many countries, for example, a leading oil-and-gas company was able to invest in renewable natural-gas technologies much earlier than its peers. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management According to our research, the consistent winners apply a highly developed approach to geopolitical risk management that emphasizes opportunity rather than just mitigation, involves the entire organization, and leverages sophisticated and robust analytical processes. A sports industry client was exploring hosting a large televised event in a Middle Eastern city. In such discussions, its of utmost importance to make sure that all affected geographic regions are represented. As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. No matter their starting point, BCG can help. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. All areas of the globe are covered by our seasoned team of subject matter experts, national security advisors, consultants, analysts, investigators, and in-field agents. While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. Utilize our expert insight and data to get risk scores tailored to your specific metrics, Benchmarking, Pricing and Aggregation, and Scenario Analysis Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. In addition to their normal duties, country chairs are responsible for liaising with all external stakeholdersincluding national and local governments, community organizations, and other enterprises. Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. Corporate strategy, corporate risk management, corporate finance, insurance underwriters and exposure managers, investors, data analytics teams, and intelligence and security departments all partner with us to evaluate opportunities; identify key geopolitical risks to business plans, portfolios, and suppliers; allocate resources more efficiently and effectively; model and prepare for potential economic and geopolitical shocks; and communicate better with other internal and external stakeholders. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Some foreign firms, who were perceived as having received favoritism from the Ethiopian government, were specifically targeted by protesters and the government had to declare multiple states of emergencies that were extremely disruptive to the business operations of those foreign firms. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. Cyber risks are believed to have the deepest impact on supply chains rated by 34% as a high impact and 54% as medium. We hosted our 6th annual Top 10 Geopolitical Risks event today with KPMG global alliance partner, Eurasia Group, and we highlighted the relevance of the risks Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest, South China Morning Post, May 29, 2021, scmp.com. Long-term planning can also cover such issues as the following: For both internal and external stakeholders, walking a geopolitical tightrope may cause leaders to redefine how they think about and position their companies. New York NY 10055 a political risk analysis and assessments synthesize, and risk! Of geopolitical risk analyst, your job is to work for geopolitical risk consulting - i.e global knowledge to help said. Worry that a company will hold itself to different standards in different.. 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