There could not be a more important time to focus on geopolitical risk, the number one global corporate risk, pervasive and impacting on all other risks, it is at the heart of the most significant threats and opportunities to business, and sets the scene and conditions for how and where we work. Put simply, geopolitics is about how your business sits within the economy, policy and geography, and the impact that events and incidents have on this relationship with you.
Geopolitical circumstances demand a high degree of engagement and understanding whether your organisation is small, medium-sized or large, and whether it operates locally or globally. Increasingly, no company, however large or small, is immune from the impact of geopolitical risks. Today’s businesses operate in a world where geopolitical risk is no longer limited to violence or disruption – or isolated to just a few regional hotspots.
Areas that were once regarded as predictable and stable have become volatile. And economic, policy and environmental changes bring any number of new uncertainties. The world is less certain and more complex. In an increasingly globalised and interconnected world, the ripples of natural, man-made and political upheaval spread far and wide, and morph rapidly. More and more, risk managers need to be able to identify and understand geopolitical risks, their drivers and the connections between them, so they can mitigate the risks and seize new opportunities.
Different functions within businesses also need to look at these connected risks collectively and manage them using an integrated approach. You need credible and up-to-date information, relevant risk insight and risk analytics to see the potential impact of interconnected risks to your business. Risk managers need to speak to their CEOs and boards about this because boards are reporting that geopolitical risk is their top concern.
Global Client Relationship Director, Willis Towers Watson