Are Boards Ready for Geopolitical Risk?

Boardroom conversations have long centred around financial, operational, and reputational risks. But in 2025, a more volatile and less predictable threat looms large: geopolitics.

For years, geopolitical tensions were considered the concern of multinational corporations, defence contractors, or energy giants. But that’s no longer the case. In an increasingly fragmented and unpredictable world, every board now needs a working awareness of geopolitical risk – and most don’t have it.

The New Boardroom Reality

We are operating in a post-globalisation landscape, marked by protectionism, ideological division, and systemic instability. Trade wars, AI arms races, fragmented regulation, cyber-sabotage, and shifting global alliances – these aren’t just background noise. They now actively shape the environment in which business decisions are made.

And yet, geopolitical fluency remains conspicuously absent from most boardroom conversations.

“We’ve seen risk become more political, more polarised, and more unpredictable,” says one board advisor to FTSE 250 companies. “The assumption that these issues sit outside the business strategy conversation is no longer valid.”

What’s Changed, And Why It Matters

Geopolitical disruption is no longer a niche concern or a theoretical scenario. It’s already impacting companies across every sector, including those previously seen as domestic or low-risk:

• Data sovereignty rules are diverging – creating complex compliance obligations.
• Supply chains are being restructured for political rather than economic reasons.
• AI regulation is becoming a strategic tool for state advantage.
• War and sanctions are distorting access to capital, markets, and talent.

These dynamics influence everything from procurement to product design to pricing. Boards that ignore them are not just uninformed, they’re exposed.

Why Boards Must Engage

Geopolitical risk isn’t just a matter for the CEO, the head of risk, or the government affairs team. It’s a governance issue.

Resilience, long-term value creation, stakeholder accountability – all of these fall squarely within the board’s remit. And yet, few boards currently stress-test their strategy through a geopolitical lens. Even fewer have formal structures in place to monitor or respond to emerging political risk.

Boards are increasingly expected to:

• Oversee resilience strategy in light of cross-border uncertainty
• Ensure business continuity planning accounts for political and regulatory disruption
• Guide long-term strategic adaptation, not just crisis response
• Consider the ethical, legal, and reputational implications of global operations

What This Means for NEDs

Boards don’t expect every NED to be a former diplomat. But they do expect curiosity, informed questioning, and a willingness to challenge assumptions that no longer hold in today’s environment.

Five Questions Every NED Should Be Asking:

1. How exposed is our operating model to global political or regulatory shifts?
2. What assumptions are we making about cross-border trade, capital, and data?
3. Do we have the right intelligence to monitor geopolitical risk in real time?
4. Are our scenarios and simulations reflecting political, not just economic, disruption?
5. Is geopolitical risk considered in our board skills matrix or advisory structures?

These questions signal board maturity, and they help prevent reactive, last-minute strategy pivots under pressure.

Building Geopolitical Literacy: A Practical Guide

Most NEDs didn’t grow up in geopolitics but that’s no excuse to opt out. Building geopolitical literacy doesn’t require a PhD in international relations. It requires structured curiosity and intentional learning.

Here’s where to start:

• Follow credible briefings and think tanks
  Sources like Chatham House, the Council on Foreign Relations, and CSIS offer accessible, business-relevant updates.
• Engage external experts
  Invite geopolitical analysts, foreign policy experts, or national security advisors to speak at board strategy or risk days.
• Stress-test scenarios
  Integrate geopolitical “what if” models into your business continuity and risk planning exercises.
• Join the right networks
  Director forums, international governance groups, and cross-border NED networks can expose you to broader thinking and case studies.
• Make it a standing item
  Ensure geopolitical developments are part of every board’s horizon-scanning agenda.

The Boardroom Must Widen Its Lens

As the world becomes more volatile, interconnected, and strategically contested, geopolitical risk is not a niche concern. It’s a mainstream business issue – one that touches on every area of governance, strategy, and reputation.

The boards that thrive in this environment won’t be those with perfect intelligence, but those with proactive awareness and adaptive strategy. In this new landscape, resilience is no longer about contingency planning, it’s about the board’s ability to anticipate, interpret, and lead through uncertainty.

Because geopolitical blindness isn’t just a gap. It’s a governance failure.

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