Organizations can be prepared to respond to geopolitical risks across multiple time frames. Industries that are positively exposed to geopolitical risks suffer a decline in investment that is larger than the aggregate effect. Sorry, something went wrong. The Company: International Consulting Company is a global consulting firm based in Hong Kong. Creating short-term, midterm, and long-term response strategies ensures that a company can not only handle a fast-changing situation or emergency but also make the investments needed to seize opportunities and become more resilient. Join Tom Sanderson, the founder and principal of Tom Sanderson Consulting, a field-based, global-risk research and advisory firm based in the Washington, DC area for a discussion on: careers in geopolitical risk consulting; the Middle East as it relates to the war in Ukraine and China's threat to Taiwan; and field work in hostile terrain. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. Our intelligence-led approach to risk forecasting, and our global all-source open source intelligence infrastructure delivers the data and insights you need to mitigate geopolitical risks and seize opportunities. ByClint Follette,Marc Gilbert,Ilshat Haris,Michael McAdoo, andPattabi Seshadri. MAX's Geopolitical Intelligence Services knows your part of the world because we're part of it too. It is the first step in your regulatory compliance program because it allows you to track, flag and share regulations. Companies are walking a geopolitical tightrope. The EY survey last year on bank risk management noted that chief risk officers may be underestimating the potency of political change (with) only about half viewing (geo)political risks as among the most important emerging risks over a five-year horizon this is down from 60% in our last survey in 2019. 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. Unfortunately, geopolitical risk commonly is misunderstood by the Andrew Cuomo, Governor (NY) Bill & Melinda Gates Foundation. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. Major geopolitical events can often arise quickly and unpredictably. Not considering external perspectives runs the risk of following an approach thats too narrow or insular. FS firms need to be agile and resilient to thrive. The Ukraine war is likely to drive geopolitical fragmentation and the emergence of blocs, in our view, BlackRock said in its report. This website uses cookies. 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. Full-Time. Trade Wars and a Stronger Europe. Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. Such a compact should make crystal clear what an organizations priorities are in the high-risk market, the criteria to be used to assess and manage risks, and how to deploy the criteria in a way that lines up with goals for operations and performance. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. We help companies anticipate and quantify critical external strategic business risks that might adversely impact their investments, personnel, interests, and assets anywhere in the world. BCG was the pioneer in business strategy when it was founded in 1963. Systemic-risk managers adopt a primarily defensive position, focusing on protecting their businesses from the downsides of change. Not engaging in such discussions in the current geopolitical context would be malpractice. Such a consensus can create a set of guiding principlesand, as importantly, a set of trust-based relationships and mutual understanding across the organizationthat enables rapid, purposeful reaction grounded in a shared set of priorities when risk scenarios play out. Related Expertise: We study the dynamic effect of industry- and firm-specific geopolitical risk on firm-level investment. Because the company sells its products almost everywhere, problems that pop up in one country often may have already been solved in another. BCG's international trade consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. Stress in global financial markets is significant. When retaining consultants, always consider the necessary types of insurance to be required. 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. For decades, companies built their . And a narrative that works in one place could inhibit market opportunities in another or create sensitivities among regions. Geopolitics is "the study of the effects of Earth's geography (human and physical) on politics and international relations.". Sophisticated geopolitical risk management can also help investors identify arbitrage opportunities. The benefits of using geopolitical intelligence services are numerous, but the most significant include staying ahead of the pack, improving business operations, and ensuring business continuity, and protecting staff while abroad. Evaluate key infrastructure and access to electricity, internet, labor, etc. Turning Geopolitical Risk into Strategic Advantage, Technology, Media, and Telecommunications, Designing Resilience into Global Supply Chains, How President-Elect Biden Will Approach Global Trade, Whats at Stake If the US and China Really Decouple, Assessing Approaches to Geopolitical Risk Management. "dots": false, Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. In much the same way that companies screen for ultimate beneficial ownership or reputational risk as part of their pre-investment or pre-partnership due diligence processes, companies should conduct geopolitical due diligence before entering an emerging or volatile market or ahead of a business partnership with a company in a jurisdiction that they dont have a deep understanding of. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. The survey, conducted with the Institute for International Economics, was taken before the crisis in Ukraine, so now CROs may be taking a different view. According to the World Economic Forum in its 2023 Global . As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Internationally it poses increasing management challenges, particularly at board level. 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. 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.. oil companies, airlines, tech firms ,etc.). Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification 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. International Trade, Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. Depending on the circumstance, a companys leaders may have to weigh the effect that political or media scrutiny on the companys operations in one area has on its holdings in other locales. by The geopolitical risk firm that helps you understand the world. Speaking to the Atlantic Council recently, US Treasury Secretary Janet Yellen warned that it is imperative for the United States to work with China to avoid a bipolar monetary order emerging from the war in Ukraine and ongoing geo-political conflicts. Turn qualitative country risk information into quantitative risk analysis and scores, Country Risk Investment Model But if those talks dont directly affect a companys operations, its board may not need to dedicate time to them. Many companies, both financial and non-financial, were caught off guard, despite Putin having telegraphed his intentions for months in advance. 1. One stream is to work for consultancies - i.e. [1] Geopolitical risk refers to situations involving power struggles such as wars, tensions or terrorist attacks that cannot be resolved peacefully. 2. Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. 5. Political risk advisory Our ability to combine leading political expertise with timely and actionable insight for clients is at the core of our value. Taking a bionic approach to digital transformation can lead to successful business outcomes. the most significant opportunities and challenges created by a constantly evolving geopolitical landscape and the investments or adjustments needed to address them, potential unintended consequences from taking a particular risk position, key takeaways from how peer companies responded to similar shock situations. trust us to help them make informed decisions, Professional services Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. A major global technology company offers another good illustration. Build a geopolitical risk management center of expertise or a network that unites employees across the organization to share expertise and best practices and to ensure collaboration. The Great Decoupling. Another short-term action is to invest in strategy, PR, and government-relations teams that can serve as the companys points of contact with senior government officials and key stakeholders in multiple jurisdictions. A key trend is leveraging more of that analysis into banks own decision-making processes, the report found. 2023 Kroll, LLC. Economic and Geopolitical scenarios Political risk management through context intelligence and strategic planning is at the heart of what we do. Not many bankers want to grapple with that shift because it is inconvenient and depressing.. Stay connected with us and get all latest updates. We call these archetypes holistic-risk evaluators, risk entrepreneurs, systemic-risk managers, and nascent-risk managers. The ability to proactively navigate turbulence can mean the difference between prospering through a crisis or falling victim. In volatile times such as these, a companys instinct is to focus on defenseto protect the business from harm. Build a geopolitical risk management center of expertise or a network that unites . They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Boston Consulting Group is an Equal Opportunity Employer. "autoplay":true, They may have to balance, given the risks, near- and long-term market priorities. The Position . A large organization is likely to have stakeholders with differing cultural reference points and opinions on issues such as human rights and privacy. Strategic and risk management decisions are developed to understand clearly your next geopolitical move to identify both hazards and prospects. "fade": true, Whether companies are concerned about continuity in a market that is experiencing political upheaval or evaluating a significant partnership in a jurisdiction that is known for widespread corruption, conducting geopolitical risk assessments results in a deeper, more granular understanding of the threats and risk mitigation possibilities. Quantifying return on advocacy is difficult, however. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. Enter your username or email to reset your password. Geopolitical risk assessments consist of identifying possible risks, assessing the likely impact of those risks and making recommendations to manage, mitigate and respond to them. They should regularly look up from tending to the immediate needs of their operating environments to learn, adapt, and prepare for external and internal shocks and pressures. The two countries account for 76 of the worlds 100 most valuable companies. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence (if different), and our use of cookies as described in our Cookie Policy. Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . Sign in with your username. Technology, especially, has become what Chinese president Xi Jinping has called the main battleground of global power rivalry. A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels. <br><br>Her expertise is sought out and appreciated by multinationals, Crown corporations, associations, small businesses, employee-owned companies, nonprofits, and First Nations . But in the age of instant information, the story a company tells about itself in one market wont stay there. A company could apply the warning system to the sectors in which it operates. Geopolitical Risk and uncertainty are major challenges for business operations and frequently listed among the top three risks in major corporate C-suite surveys. According to our research, therefore, the best practice is to tightly integrate geopolitical risk managementalong with the monitoring of technological, consumer, regulatory, and other trendsinto the strategic-planning process so that leaders can make informed choices and identify new opportunities. A counterparty who defaults on a contract, or whose business . Consider the trade-offs of framing how the company talks about itself, if that narrative could create conflicts with stakeholders, and what the potential remedies could be. Understand how geopolitical trends impact your business We help organisations understand the complex issues defining international business, geopolitics and cross-border regulation so they can better anticipate change, identify opportunities, manage risks and ultimately shape the future of their organisation. As a management consultant, Dr. Smith has worked for PA Consulting Group . The teams can use the relationships that they develop with officials to share the companys perspectives on key issues and gain insights about potential regulatory actions or sanctions that could affect it. The degree to which banks systematically analyze political risks varies across the industry. Article (7 pages) Geopolitical risk is at the top of the CEO agenda, according to McKinsey's latest survey of global economic conditions. Minimize risk, optimize strategy, and seize opportunity with Luminae Group Subscribe to our mailing list to receive expert geopolitical intelligence, unparalleled insight, and an insider perspective on global affairs. In the face of fragmentation and uncertainty, many business leaders are responding by intensifying their focus on resilience. Channeling the policy debates under way in the European Union, You may share a link to this page on any of the sites listed below. Political risk consulting. Subscribed to {PRACTICE_NAME} email alerts. Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. Political risk consulting firms. 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. . Geostrategic Business Group | EY - Global Close search Trending Why Chief Marketing Officers should be central to every transformation 31 Jan 2023 Consulting The CEO Imperative: How will CEOs respond to a new recession reality? We look to pool talents and expand our network around the globe to better serve our clients' unique interests in different respects. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. In extreme cases, a disruptive event can jeopardize an entire business. Our methodology allows us to assess differences in operating models and the degree of process maturity relative to industry practices as well as to identify opportunities for improvement. Tailored, high-impact executive workshops, Speaking engagements and macro strategy conversations.

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