1. 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. The organization saw a troubling trend in a number of key markets that could potentially threaten its growing cloud-storage business: mounting anxiety on the part of policymakers and customers, who were worried that local governments could access confidential data kept on servers in certain countries. Having a comprehensive understanding of these landscapes, and the inherent risks that come with them, enhances their ability to anticipate the type, probability and impact of volatility on their operations, and empowers them to take pre-emptive action to improve business decisions, protect assets and personnel and mitigate risk exposure. Leaders can cultivate cohesiveness by bringing key stakeholders to the table to share views on a given engagement or project. Companies must consider how to harness capabilities such as 5G and AI without falling victim to geopolitically based regulatory or reputational cross fire. Already a member? This sentiment largely continued in the second . Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Comprehensive spectrum of risk-based screening and due diligence solutions. Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. A major global technology company offers another good illustration. Theyre the technology companies and oil producers that can tell a political backlash is brewing well before it hits full force and then use their foresight to reposition their businesses ahead of competitors. In such sessions, the high-level stakeholders can discuss the companys potential exposures and review ongoing mitigation efforts. Expropriation 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. 08 March 2022. Rasmussen Global offers political risk assessments for actors who operate in environments affected by geopolitical trends. being employed directly by an oil firm or airline . Subscribed to {PRACTICE_NAME} email alerts. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. Some may, for commercial and strategic reasons, choose to strengthen ties to the countries where the companies are based. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. Some of these political consulting clients include: Airbnb. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. But the discussions often focus on a specific investment, project, or market entry or exit. Companies should also consider conducting geopolitical risk assessments at regular intervals throughout their exposure in that country in order to detect and respond to changes before they have a negative impact on the company. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk. Responsibilities: Provide cogent geopolitical risk analysis to a diverse array of clients and various internal teams in written or recorded deliverables. Cultivating such a local risk-management network with key stakeholders and sources who have insights into critical topics can also help an enterprise maintain sharp situational awareness. Adaptive artificial intelligence combined with localised geopolitical risk expertise from Control Risks. BCG was the pioneer in business strategy when it was founded in 1963. Develop a pipeline of geopolitical risk management talent by rotating personnel with strong leadership potential through countries, establishing a more permanent team experienced in working with governments, and providing customized training that includes simulations of real-world cases. Because the company sells its products almost everywhere, problems that pop up in one country often may have already been solved in another. Systemic-risk managers adopt a primarily defensive position, focusing on protecting their businesses from the downsides of change. Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. Site by Odgis+Co and ICVM Group. Idiosyncratic geopolitical riskconstructed using the transcripts of firms' earnings calls, and Geopolitical shifts and technology changes are transforming international trade, creating both risks and opportunities for companies that can navigate this new environment. The geopolitical risk firm that helps you understand the world. . The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. Eurasia Group 2023. Political risk consulting firms. We have developed an analytical tool for assessing an organizations geopolitical risk management practices and opportunity. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. Stakeholder and Influence Mapping In 2020, it will move beyond strategic tech . 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 Reporting focuses on both incident analysis and trend monitoring, providing forward looking assessments to facilitate proactive risk management decision making and asset . Turn qualitative country risk information into quantitative risk analysis and scores, Country Risk Investment Model 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. 5-minute read. This website uses cookies. One test could explore the conditions in which the company may be compelled to ring-fence its IT infrastructure (to protect against cyberattacks or comply with regulatory requirements) or split off its business in a particular region. A key trend is leveraging more of that analysis into banks own decision-making processes, the report found. 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. 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 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. One stream is to work for consultancies - i.e. Sometimes, the payoff is simply that the company can continue doing business as usual. There are no reliable historical streams of data that one can easily plug into a model. As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. 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.. 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. And differences can dissolve into disagreements about risk and strategy. Nearly half of bank CROs (48%) plan to broaden methods for identifying new or emerging political risks and a quarter plan to build new tools for qualitative tracking and reporting on political risk measures.. While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. Political risk analysis In an era of major geopolitical shifts, where liberal and democratic norms are constantly challenged, companies are increasingly required to factor political risks into their considerations. (See Exhibit 1.) Financial risks have probably never been more acute. These organizations take many forms. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. (2019). Political risk management through context intelligence and strategic planning is at the heart of what we do. In the aftermath of the US presidential election, CFOs appeared very optimisticwith that quarter's survey registering the sharpest uptick in sentiment in its seven-year history. "autoplay":true, 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.. Please try again later! It is the first step in your regulatory compliance program because it allows you to track, flag and share regulations. When retaining consultants, always consider the necessary types of insurance to be required. /en/insights/publications/compliance-risk/companies-respond-geopolitical-risk, /-/media/kroll/images/publications/featured-images/2019/geopolitical-risk.jpg?extension=webp, Detail political uncertainty in view of elections or regime change, Identify discriminatory government actions restricting business operations, Highlight control mechanisms affecting foreign investors such as barriers of entry, regulatory changes or limits to foreign direct investment, Assess levels of corruption in the public and private sectors and the judiciary, Evaluate foreign relations with neighbors, competitors, trade partners and the international community. Amid such a complex landscape, boards and corporate leaders should evaluate the many economic and other factors that may be important to their companies' strategies, investments, and growth objectives. 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