As we heard from Dr. Azeem Ibrahim at the opening of our recent forum in Napa, this coming century will feature an intense competition between free and authoritarian states. We assume that the rule of law and personal freedom are attractive, but we must be on our guard for systems which appear to promise more materially than our image of authoritarianism generally suggests.
And that is just one broad type of geopolitical risk. The ongoing COVID-19 pandemic and Russia’s escalating war in Ukraine have demonstrated how geopolitical shocks can upend the world economy. Such events have also upended the daily routine and strategic focus for general counsel and other corporate business units, thrusting them into unknown territory and requiring immediate plans for managing everything from business continuity to reputational risk to compliance with evolving global regulatory climates.
Part of managing geopolitical risk is also considering the ramifications of a company’s core value narrative. How does a company talk about itself? If that narrative could create conflicts with stakeholders, what are the potential remedies? Global organizations are likely to have internal and external stakeholders with differing cultural reference points and opinions on political issues. And differences can dissolve into disagreements about risk and strategy. Geopolitical risk is very real and is an area of intense, growing focus for corporate boards, and therefore also a major focus for GCs and the outside providers who serve them.
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