How to manage political risk
Business ignores geopolitics at its peril, says this former diplomat turned senior executive.
Before the coronavirus pandemic analysts had already begun to argue that political risk had replaced economic risk as the main source of uncertainty, even (or especially) in developed markets.
Although the pandemic has brought economic risk right back, political risk has not gone away and is likely to grow further on the back of global economic deterioration, whoever occupies the White House in 2021.
Political risk has gone mainstream and deserves to be treated like any other key success (or failure) factor for business. Executives don’t need to be geopolitical experts, any more than they need to be accountants. But just as it’s essential to be able to read a balance sheet and cash flow statement, today it’s also essential to be able to read the geopolitical landscape.
