Geopolitics in the boardroom: Risk analysis and anticipation

If there are still sceptics who doubt that we have entered a new era of geopolitics, they will find an eloquent expression of this reality in the words of central bankers turned politicians. It was Canadian prime minister Mark Carney, former Governor of the Bank of England, who delivered the clearest geopolitical analysis at the 2026 World Economic Forum (WEF) in Davos where ‘Greenland’ and ‘annexation’ were the only words on everyone’s lips.

‘Stop invoking “rules-based international order” as though it still functions as advertised. Call it what it is: a system of intensifying great power rivalry where the most powerful pursue their interests using economic integration as a weapon of coercion,’ warned Carney, who insisted that ‘we are in the midst of a rupture, not a transition’.

Before him, it was European central banker Mario Draghi whose report on EU competitiveness sent shockwaves through the Union. He observed how ‘the previous global paradigm is fading’ as ‘geopolitical stability is waning, and our dependencies have turned out to be vulnerabilities’. In a world where central bankers become experts in world politics, can private companies continue to ignore geopolitical turbulence? For Johan Aurik, former CEO and chair of Kearney, a global management consultancy, the answer is clear: ‘The geopolitical world has entered the boardroom.’¹

In Europe, the change of mindset is visible at every turn. In 2025, for the first time in Europe, geopolitics was ranked as the main risk by experts in AXA’s annual Future Risks Report, while ranking second globally behind global warming. The WEF Global Risks Report offers an in-depth exploration of the idea of a ‘geopolitical recession’. Geopolitical dynamics potentially affects almost every company in some way – from energy and defence, finance and tech, to any business exposed to global supply chains and trade volatility.

This change of atmosphere is not confined to Europe. American companies have been quick to spot the dangers – and the opportunities – posed by geopolitics. McKinsey launched its own geopolitical risk unit in 2024, while it took investment bank Lazard only a few months after the onset of the war in Ukraine to open its own geopolitics team, based in Austin, Texas. More recently, AI companies like Anthropic have been hiring geopolitical analysts to train their models.

Asia is not far behind either. Pandu Patria Sjahrir, CIO of Indonesia’s sovereign wealth fund Danantara, told BNN Bloomberg, ‘This year, maybe even more so than any other year, we’re focusing a lot more on geopolitical risks,’ adding that ‘we think about worst case now in terms of underwriting. In fact, my base case is worst case.’

The Geopolitical Risk Index, first published in 2022 by Dario Caldara and Matteo Iacoviello, two economists and members of Board of Governors of the Federal Reserve, captures the changing risk environment. It gives a quantitative measure of adverse geopolitical events and associated risks. Since Russia’s full-scale invasion of Ukraine in 2022, the measures from the GPR Index are above the average for the past century (see Figure 1).

How companies are adjusting

Changing circumstances will inevitably force companies to adapt. Among the new challenges geopolitical risk poses are the wide-ranging questions it raises. Traditionally, matters related to geopolitics could be tackled by one or several departments that are all implicated in the management of risk, from legal and compliance to IT and corporate security. Departments of public affairs were also never far from these issues, as they must be well informed both to defend the company’s interests and to provide adequate services to its clients and business partners. Expertise in geopolitics requires a hybrid approach that combines an inward perspective – how should our company navigate these risks? – with a public-facing position.

This expertise must then be escalated through to the highest level of decision-making. ‘We used to live in a rules-based, predictable world where the level of uncertainty was fairly low compared to what it is now. For your average C-suite, with this heightened uncertainty, the number of decisions is increasing while timelines get shorter,’ says Aurik. Hence the repeated calls to establish a new role directly at the boardroom level – a Geopolitical Risk Officer (GRO) or Chief Geopolitical Officer (CGO), who would directly advise the top executives. Forbes describes the ideal GRO as both a ‘visionary’, who anticipates the appropriate risks and trends, and a ‘convener’ who makes sure that all the relevant stakeholders are involved. This type of profile is often found among diplomats or former security advisors.

Ben Gibson, a seasoned former diplomat, joined the Danish energy giant Ørsted in 2023 to become its newly appointed Senior Manager for Geopolitics, Global Regulatory & Public Affairs. While he admits that the full-scale invasion of Ukraine by Russia was the ‘tipping point’ for the role’s creation, it came ‘on top of broader trends and dynamics that many people have observed and that just continue to accelerate’. ‘It was created to have someone who is effectively focused on geopolitics,’ confirms Gibson, who describes his role as a ‘hub within the company’. Likewise, two years ago Vanessa Salas-Pouget joined the French aerospace and defence company Safran to assume the role of Senior Vice President for Geopolitical Risks & International Affairs, following more than fifteen years of service as a diplomat. This internalized geopolitical function now supports all of the group’s business lines and operates across the entire organization, from the operational and technical level to top management, where her input contributes to the company’s strategic orientations.

Other businesses did not wait for the war in Ukraine before developing in-house geopolitical capabilities. In 2014, Thomas Donilon, former US National Security Advisor for Obama, joined the BlackRock Investment Institute (BII), where a dedicated geopolitical team was set up. Jack Aldrich, Director at the Geopolitical Research & Strategy team, describes BII as a ‘think tank at the heart of BlackRock, covering macro issues, market issues, portfolio construction issues, and now geopolitics’. Their main product, publicly available, is a ‘geopolitical risk dashboard’ that combines qualitative analysis such as a top ten risk ranking with quantitative tools that provide a measure of the ongoing risk posed by geopolitical development.

Creating an entirely new team dedicated to geopolitics is not the only option available. At Deutsche Bank, which has been at the forefront of geopolitical risk analysis, a deliberate choice was made to decentralize geopolitical analysis and ‘infuse’ it across all the business lines and control functions. According to Stephen Fisher, Head of Government & Public Affairs, the idea is to make it a ‘team sport’, where all decision-makers consider geopolitical analysis. Geopolitics adds to the list of variables that bankers must factor into their risk analysis and is among the topics they discuss at the highest level during their weekly global meetings.

At the French giant L’Oréal, analysis and insights emanate from many different parts of the company. Pascal Harlay, L’Oreal’s Strategic Intelligence Analyst, describes his role as that of a ‘consultant or journalist, where information is not only transversal but also purpose driven.’ This decentralization can nonetheless be challenging, both when it comes to producing the right kind of information and when it comes to its dissemination. ‘You can have an article with considerable impact if it reaches the right person, but in large companies, with such a diversity of roles and projects, ensuring that connection is not always obvious,’ he admits, before reminding us that ‘it is a hierarchical organization, with information flowing from the bottom up through the different levels; and the higher it goes, the more it is aggregated but also refined’.

Building an ecosystem

Whether decentralized or streamlined into one dedicated unit, there is a clear trend emerging within large companies towards internalizing competencies and skills in geopolitical analysis. However, the rise of in-house capabilities does not come at the expense of traditional external consultants. On the contrary, internal specialists simply complement the work of specialized advisories. Matteo Ilardo, lead Europe analyst at RANE, a geopolitical risk intelligence company, regularly works with the in-house analysts who act as the ‘link between the decision-makers within their company and external experts’.

The type of product is often complementary. Geopolitical advisories usually offer forecasting as their main service. ‘Prediction is what we sell,’ confirms Matteo Ilardo, who adds that forecasting is always part of a broader trust relationship with clients. ‘They know that you yourself don’t know the future. But you’re helping them to put a bit of clarity into the growing uncertainty,’ he says.

By contrast, in-house geopolitical expert Ben Gibson offers a different input. ‘My role is definitely not to predict the future, but it is to provide some additional considerations to bear in mind when you’re weighing the two sides of the ledger,’ says Gibson. ‘I would describe it as taking in the right information, synthesizing it and distilling it for stakeholders in the company, and then feeding it in, in a targeted way on specific questions and issues.’ It is a task often performed directly for the CEO and their team.

In this emerging ecosystem, analysts also flourish in public research institutes and think tanks. The European Central Bank (ECB) regularly publishes notes on geopolitical risk, a topic that the International Monetary Fund (IMF) has also started to tackle. The European University Institute (EUI) has begun publishing an annual report on the ‘Global Risk to the EU’. Its latest edition identified a major strike on EU critical infrastructure as the top risk for 2026.

Whether the expert is internal or external, their interaction with the highest level of the company has increased. ‘Very often we are put in front of the entire board of a very big company,’ confirms Matteo Ilardo, who sees this as evidence of how ‘geopolitics has become an important element of the core business’. ‘We are definitely talking to the C-suite,’ says Jack Aldrich. ‘Our team is frequently asked to speak to board level audiences, to speak with chief investment officer level teams. The appetite is there and we have trouble meeting the demand.’ This surge in demand only reinforces certain analyses that call for ‘CEOs to personally play the role of Chief Geopolitical Officer’.

Looking beyond the disconnect between geopolitics and the economy

Although the importance of geopolitics is questioned by hardly anyone in the private sector, its rise has not prompted fundamental change everywhere. As Carsten Brzeski, Global Head of Macro and Chief Economist at ING, recalls from his encounters with clients, it is still common to see private businesses not making any changes in their organization. ‘What has your company done? Have you adjusted your supply chains? Very often, the answer is no,’ says Brzeski.

This lack of adjustment should not necessarily be interpreted as a lack of clarity. Geopolitical risk and uncertainty do not automatically translate into specific market reactions. Indeed, a quick look at the state of the economy, and especially that of financial markets, can reassure any actor worried about the state of the world. Despite the temporary drops caused, for example, by Trump’s ‘Liberation Day’ trade announcements (see Figure 2), US indices such as the S&P500 or the Nasdaq both had remarkable years, their success largely driven by the AI bubble.

The stock-market boom is not limited to the US. South Korea’s Kospi index had its best year since 1999, Italy’s FTSE MIB its best since 1998, and even in Israel, where geopolitics is arguably an everyday matter, the stock market has been flourishing. Adam Tooze highlighted in summer 2025 that ‘[i]f you had bought the Israeli stock index on October 7, 2023 you would have made more money than in any stock market in the world’.

Carsten Brzeski and his team highlighted this ‘disconnect’ in their 2026 outlook report: ‘Despite all the heat, financial markets and the global economy remained relatively unscathed.’ One potential explanation for this disconnect would be that markets are mispricing political risk, a real possibility considering the difficulty macro-analysts have in integrating the geopolitical factor into their models.

For Thomas Gomart, the director of French think tank Institut français des relations internationales (IFRI), the corporate world cannot, by its very nature, fundamentally tackle the risks posed by geopolitics. In a report on the ‘manufacturing of risk’ cowritten with Siméo Pont, he reviews the geopolitical analyses published by the private sector and finds a ‘prevailing narrative’ according to which, despite all the turbulence, the fundamentals of globalization will not be questioned. By contrast, based on the research carried out by think tanks, Gomart and Pont warn that we may see ‘scenarios that are much more disruptive than those to which the corporate world has become accustomed’.

The possibility of a strong ‘correction’ is nonetheless anticipated by private actors. ‘The more geopolitical tensions we get, the higher the likelihood that the disconnect will not hold. If you look at it as an equation, this is definitely not an equilibrium; something has got to give – either geopolitics slows down, or it’s the economy,’ argues ING’s Brzeski.

Beyond the possibility of mispricing, the apparent disconnect may also reflect acute preparedness by both private and public actors. The latter, especially in Europe, have been proactive in sheltering populations and markets from major disruption, from the Covid-19 pandemic to the Russian invasion of Ukraine and the resulting energy shock. As for the former, the resilience of markets could be seen as the outcome of appropriate anticipation and preparation, or as the positive result of rigorous geopolitical risk analysis. Thinking of a disruptive scenario does not mean it will necessarily come true. To the contrary, it may just mean that, if worse comes to worst, everyone will be ready – provided, of course, that they have received the appropriate guidance on geopolitical risk.