Addressing geopolitics in the boardroom. | KPMG | GLOBAL

Addressing geopolitics in the boardroom

Addressing geopolitics in the boardroom.

What should your executive team be asking themselves in a geopolitically Volatile, Uncertain, Complex and Ambiguous (VUCA) world?

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Global Geopolitics Lead, Global Clients & Markets

KPMG International

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Companies have long operated under a relatively predictable set of assumptions made possible by established global rules of order. But over the past few years, we have seen a rise of ‘isms’ causing these rules to break or shift: populism; nationalism; authoritarianism; extremism; and even neologisms (with the advent of ‘fake news’ and ‘post-truths’).

It might be easy to have a relatively informed view on this new geopolitical landscape, but it’s hard to be a specialist – particularly when economic logic is seemingly no longer a constraint on politics and companies can take nothing for granted.

‘Wait and see’ might be the easiest route, but the signals can be predicted if you look in the right places, risks managed if you know how, and opportunities exploited if you can turn foresight into action. Take a look at the Geopolitics Boardroom Questions to help frame the exposure of your business to geopolitical events, and identify what actions you can be taking to anticipate and respond across all layers of your business.

Geopolitical risks could manifest in a number of ways, such as:

Operations

— From regulatory convergence to divergence - increasing compliance costs for companies
— Keeping slack in the supply chain - and publically stating that to give comfort to investors

Labor
— Overnight bans on the movement of talent (based on nationality)
— Want to work becoming as important as the right to work in a (developed world) location

Capital
— Currency volatility requiring stronger hedging strategies
— Greater uncertainty over the short, medium and long-term investment environment (Brexit and NAFTA) 

 

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