Political risk: Preparing for threats, seizing the opportunities

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It is not simply conflicts and their effect on the economy which contribute to the geopolitical risk environment which businesses must navigate. A combination of underlying political tensions in various regions is leading to a more destabilised global order, marked by conflicting narratives that are eroding trust and increasing insecurity in societies that have already been politically weakened and economically constrained in recent years.

So, how can directors reliably assess both the short and long-term impact and consequences of so varied and amorphous a set of issues on their businesses? What balance should be struck between seeking opportunities and preparing for threats? To what extent can insurance mitigate the cash flow risks, the major liability risks faced by organisations involved in international trade, and the potential for personal liability exposure to the directors themselves, and protect assets on and off the balance sheet?

The aim of this guide is to provide a toolkit to assist directors in understanding and keeping pace with this fast-changing and increasingly complex context. It takes the form of 12 questions designed to break a diverse set of issues down into a manageable series of topics. The list is not exhaustive and answers to each question will vary tremendously depending on the size, maturity and nature of an organisation’s operations. Nevertheless, in response to each question, we identify a range of issues which are likely to be relevant.