Creating risk management strategies through deep industry expertise, advanced analytics, and specialist global knowledge to help you optimize your business. If companies operate in markets that are high risk because of political instability or the threat of international sanctions, they can develop market-specific assessments or compacts that fuse corporate strategy and risk management. BCG was the pioneer in business strategy when it was founded in 1963. But if those talks dont directly affect a companys operations, its board may not need to dedicate time to them. One way to initiate a more strategic approach is by assessing the risks that matter the most to a business. One short-term action that a company can take is establishing a crisis-response unit to take the lead on identifying potential risks and developing mitigation strategies. Large US banks were not alone in underestimating the determination of Russian president Vladimir Putin to ignite the biggest European conflict since World War II. Geopolitical events can manifest themselves in many ways. We have developed an analytical tool for assessing an organizations geopolitical risk management practices and opportunity. An escalation of geopolitical events can lead to outright wars . How to factor geopolitical risk into technology strategy | EY - US Trending US pandemic response and relief funding - proactively mitigating fraud, waste and abuse 2 Feb 2023 The COO Imperative: How human emotions can unlock supply chain success 23 Jan 2023 Consulting 2023 Global economic outlook: Transforming uncertainty into opportunity A quick message or email to the global functional marketing, finance, or risk community, the company told us, allows for rapid troubleshooting, the cross-pollination of insights, and the sharing of best practices. Instead, boards can dedicate regular standing time to analyzing how to respond to the geopolitical risks that their enterprises face as part of a broader board effort to build more resilient companies. Country risk mapping. We are constantly searching for overlooked assets where we can navigate the risk, while others are unwilling or unable to, an executive of a private-equity firm with a decades-long record of success in emerging markets told us. 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. and risk management resources for todays professional services Seerist is the only augmented analytics solution for threat and risk intelligence professionals. Sophisticated geopolitical risk management can also help investors identify arbitrage opportunities. After consulting with top business leaders and legal, public-policy, and risk professionals at Fortune 500 companies in multiple industries, we suggest that company leaders can use a five-pronged approach to managing geopolitical risk. Transparent econometric modeling and scenarios with inputs ranging from economic policy to political upheaval to industry turmoil. Otherwise, internal fissures can build and burst in a way that damages culture, reputation, and performance. As one of the country's top political consulting firms, Global Strategy Group has worked with many diverse and high-profile clients to serve a range of unique needs. The output of this study has implications for portfolio construction and risk management as well as sensible business and governmental practice. Something went wrong. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. Our policy and political risk consulting team helps business leaders to anticipate, analyze and navigate the challenges arising from political developments. 1. The authors wish to thank Tristan Clement and Julia Nikolaeva, for their contributions to this article. A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels.
Indeed, in its most recent geopolitical risk dashboard, the BlackRock Investment Institute put a technological decoupling between China and the United States as the third highest risk, with a widening of the conflict in Ukraine between NATO and Russia and major cyber-attacks causing significant damage to infrastructure and financial markets seen as the top two risks. Eurasia Group's advisory and consulting business is built upon a research platform of leading political risk analysts and management consultants with deep country and sector expertise. Risk Consulting. Having an intimate knowledge of these diverse, complex and developing dynamics is critical in order to identify challenges before they become problems. Integrated solutions - consulting, risk management and broking - to help organizations prevent and protect against interlinked geopolitical risks. Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. Subscribed to {PRACTICE_NAME} email alerts. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. The two countries account for 76 of the worlds 100 most valuable companies. Many companies, both financial and non-financial, were caught off guard, despite Putin having telegraphed his intentions for months in advance. We offer our . 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. In-depth analysis, they recognize, does not come solely from algorithms. International Trade, Political risk monitoring. Many company boards already deliberate geopolitical risks to one degree or another. strategy. Cultural Missteps
People may worry that a company will hold itself to different standards in different regions. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. 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? All rights reserved. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. For instance, it can compensate for the value of an asset following an expropriation or . BCG's international trade consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage. 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. 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. The report draws on the survey results from nearly 700 experts and decision-makers globally who were asked about their concerns . There are no reliable historical streams of data that one can easily plug into a model. 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. Eurasia Group 2023. Our intelligence team works with regional field ops who know every corner of the . Internationally it poses increasing management challenges, particularly at board level. The challenges that geopolitical risks create will get worse. We hosted our 6th annual Top 10 Geopolitical Risks event today with KPMG global alliance partner, Eurasia Group, and we highlighted the relevance of the risks Leaders face an uncertain landscape. Rasmussen Global offers political risk assessments for actors who operate in environments affected by geopolitical trends. Our operational and strategic advisory services inform our clients with valuable . As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. & account inquiries, For CA: Do not sell my personal information. Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Exploring government strategy. 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. 5. They may have to balance, given the risks, near- and long-term market priorities. Note: Political risk consulting firms specializing in analyzing the business risk presented by the political environment in a region or country--including but not limited to regulatory risk in particular sectors, risks of appropriation or nationalization, and broader geopolitical risks. Reuters, The EY survey last year on bank risk management, Monitoring for Reg BI poses bigger challenge as US regulators get serious, Weighing the various approaches to Scope 3 data strategies, 10 Global compliance concerns for 2023: ESG, money-laundering, and regulatory concerns weigh on compliance officers, From values signaling to implementation: Steps for corporate tax leaders to prepare for ESG, Thomson Reuters Institute launches Technology and Innovation Resource Center, Small law firms finding success & challenges in uncertain economy, says new report, Innovation Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. Australia. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact. Discussions can focus on three risk areas: brand and reputation; operational issues, such as cybersecurity strategy; and products, services, and partnerships. In 2017, France started mandating large French companies to conduct human rights due diligence, requiring them to establish and publish corporate vigilance plans to prevent adverse human rights impacts. Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. 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. It is by no means certain that they are ready for the next major crisis, experts say. To ingrain the importance of external relations throughout their organizations, some companies rotate high performers and potential candidates for upper management into country leadership positions, where risk management becomes one of their duties. Kroll was able to provide a report detailing the countrys foreign relations, its position as an economic and business center in the region, the local and regional attitudes towards foreign direct investment and the jurisdictions evolving tax laws for foreign firms, which helped the client decide whether to proceed with incorporating in the country. In . Kroll OnTrack Inc. or their affiliated businesses. You may share a link to this page on any of the sites listed below. Learn More link icon. Human Rights Violations
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. Geopolitical risk is the number one global corporate risk. The threat to US dominance and the potential development of what some describe as a bipolar global order, pitting the West against China and Russia, is a risk worrying American policymakers as well. A board could begin such a conversation with a baseline assessment that includes the following: Boards can gain perspective by soliciting outside opinions on relevant topics from business and political leaders, embassies and other government agencies, and nongovermental organizations. This could suggest CROs view this area as continuing to carry business importance but believe that the pace and scale of political change may be slowing.. And a narrative that works in one place could inhibit market opportunities in another or create sensitivities among regions. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. Instead, they depend on personnel from government relations, strategy, and other business functions to identify and mitigate risks, with one function coordinating and consolidating input. Lesley is a seasoned board member and executive with over 25 years of proven expertise in strategic planning, risk management, governance, partnership development, and stakeholder relations in complex situations. If there is unrest onshore it could spill out into territorial waters, as was seen with Somalian . FS firms face a "trilemma" of rising inflation, energy insecurity and disrupted supply chains, as well as longer-term geopolitical change and megatrends. Financial risks have probably never been more acute. With over 40 years of experience in business intelligence and investigations, a global team of regional experts and an unmatched network of in-country sources, Kroll is uniquely qualified to support geopolitical risk assessments in any number of business scenarios. Quantifying return on advocacy is difficult, however. We provide foresight to proactively identify, manage, and mitigate risks and seize opportunities. 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. Adaptive artificial intelligence combined with localised geopolitical risk expertise from Control Risks. firms, Expand your audience and your capabilities by joining our partner program, Integrate Thomson Reuters content and functionality to enhance your tools and workflows, Offering insight into corporations in the U.S. and abroad, Insights on issues concerning environmental, social, and governance topics, A look into the inner workings of government and the courts, Legal coverage focusing on the business and practice of law, Featuring an expanded insight into the world of tax professionals, Technology and innovation resource center, Exploring how technology and innovation will influence the evolution of future services, About Thomson Organizations can be prepared to respond to geopolitical risks across multiple time frames. Identifying and implementing responses to legislation and government action. Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. 2.
They view disruption strategically, as a source of opportunity; embed risk management practices across the organization; and use advanced geopolitical-risk-monitoring tools and processes. {"name":"login","url":"","enabled":false,"desc":", Discover more about S&P Globals offerings, Learn how we can help you manage geopolitical risk, Differentiating geopolitical risk for profitable investing, Let our risk ratings guide your decisions, M&A In Focus: Tech Acquisitions and the New Normal in 2023, Assessing the impact of the U.S. Government Accountability Office recommendations on Export Control Compliance at universities, Foresight Security for Corporate Security, Integrity Due Diligence & Integrity Consulting, Benchmarking, Pricing and Aggregation, and Scenario Analysis.
11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . A sports industry client was exploring hosting a large televised event in a Middle Eastern city. . In a global business environment characterized both by hypercompetition and intensifying geopolitical headwinds, it is no longer enough for companies with global footprints to only react defensively. Some of these political consulting clients include: Airbnb. New York NY 10055. by
Full-Time. Please try again later. accounting technology, guidance, and expertise, Let us help you solve Supporting corporate third-party management programs to drive risk-based due diligence decisions. 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. Any investment in taxable fixed-income securities is subject to certain risks, including credit risk, interest-rate risk, foreign risk, and currency risk. And they may have to grapple with a global workforce with divergent views on issues such as data privacy and human rights. Comprehensive spectrum of risk-based screening and due diligence solutions. ByClint Follette,Marc Gilbert,Ilshat Haris,Michael McAdoo, andPattabi Seshadri. Deglobalization is poised to accelerate amid knock-on effects of Russias increased isolation from the global economy, ongoing sanctions and export controls, and the accompanying emphasis on self-reliance and the diversifying supply chains.. We provide geopolitical risk consulting and advisory services and solutions that are timely, market-relevant and forward-looking. Geopolitical risks affecting banks or banks customers have expanded significantly in recent years, according to a global survey report issued late last year from consulting firm EY. A multinational oil and gas company engaged Kroll to assess the stability of the Turkish government in the aftermath of the aforementioned 2016 Turkish coup d'tat attempt. 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. Not engaging in such discussions in the current geopolitical context would be malpractice. Questions to ask about key business risks arising from geopolitical and related crises Strategic, operational, financial and compliance risks are common level-one risk categories that board members and management need to consider. As political frictions inside and among regions heat up, the likelihood increases that they will affect a global enterprises operations, performance, or people. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. International Business, March 30, 2021 Regulatory Burdens
Provide cogent geopolitical risk . Such a unit could, for example, analyze political events that threaten to disrupt the companys operations materially or prepare responses to government inquiries into sensitive topics. Reputational risk could be amplified if any or all of these risks are not mitigated properly. One Western energy company, for instance, credited the skills and transparency of its government relations staff for being able to operate simultaneously in two Middle Eastern nations despite strong political tensions between the two governments. This research seeks to understand the sources and consequences of geopolitical risks. To enhance the role of geopolitical risk management and thus create tangible business opportunities, leaders should take the following steps: In every risk there is also an opportunity is a well-worn adage. Whats more, the COVID-19 pandemic has brought geopolitical risk factors into sharp relief. Any discussion of such potentially existential issues must start at the top. Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. 5
Henry EnglerThomson Reuters Regulatory Intelligence, The war in Ukraine has shed an unflattering light on the ability of large US financial firms to manage geopolitical risk, a type of risk that relies more on qualitative and subjective analysis than models and spreadsheets. Every organization we studied relies on input and expertise from the field. But in the age of instant information, the story a company tells about itself in one market wont stay there. Meanwhile continuing shortages of raw materials (39%), logistics and warehousing (35%) and components (33%) are all . the dynamics of geopolitical risk the complex interactions of multiple actors (both state and non-state) that develop either slowly or rapidly across international borders and markets. CFOs' assessments of the economy in Q3. I would like to see us preserve the benefits of deep economic integration with China, not going to a bipolar world, but clearly thats a danger that we need to address.. For decades, companies built their . Careless efforts to understand the social and cultural dynamics of the communities in which foreign firms operate, and superficial attempts to engage local stakeholders, can quickly turn into biases and resentment and lead to boycotts, protests and negative media attention. Case Study 3
Related Expertise: As geopolitical events can influence market conditions in industrialized countries just as much as they can impact developing countries, assessing and understanding them through the conduct of an effective geopolitical risk assessment will help mitigate risk exposure. "Geopolitical risks affecting banks or banks' customers have expanded significantly in recent years," according to a global survey report issued late last year from consulting firm EY. Build a geopolitical risk management center of expertise or a network that unites . We call these archetypes holistic-risk evaluators, risk entrepreneurs, systemic-risk managers, and nascent-risk managers. From project or investment selection, through market entry and ongoing risk monitoring and management, we can support you with actionable intelligence, business relevant forecasts, and tailored solutions. Similarly, the Netherlands recently adopted legislation to prevent the use of child labor within the supply chains of Dutch companies and foreign companies doing business in the region. Companies also have been attempting to measure the impact of their lobbying efforts on governments, such as by benchmarking the success of their advocacy compared with that of their industry peers or estimating potential cost savings. This website uses cookies. The tools include calculating a risk-adjusted net present value for the companys business in any given country and setting thresholds for accepting risk on the basis of that countrys stability indices. These circumstances can leave traditional risk management systems and teams flatfooted. 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. 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To identify challenges before they become problems industry expertise, Let us help you Supporting! Discussions in the age of instant information, analytics, and green lights represent... Can compensate for the next major crisis, experts say, does not come solely from.... Be drawn into geopolitical disputes, & quot ; says Kinsey traffic-light-style warning system with,!