Another short-term action is to invest in strategy, PR, and government-relations teams that can serve as the companys points of contact with senior government officials and key stakeholders in multiple jurisdictions. We offer a unique combination of advanced analytical methods and an innate understanding of intelligence gathering other security sources don't possess. Geopolitical risk assessments should be tailored to focus on relevant industries and customized to target specific concerns depending on the type of investment, expansion or partnership. Such a test would include a time frame for execution and possible technical options. Long-term planning can also cover such issues as the following: For both internal and external stakeholders, walking a geopolitical tightrope may cause leaders to redefine how they think about and position their companies. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. This sentiment largely continued in the second . 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. They then proactively address the emerging threat to gain competitive advantage. For that reason, a company may need to issue guidance on a range of other topics, such as the appropriate way to discuss geopolitically sensitive topics in publications or speeches and how to depict contested borders on maps. The Company: International Consulting Company is a global consulting firm based in Hong Kong. Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. This combination of short-term and long-term monitoring allows for timely action. by As the former Intel CEO Andy Grove famously put it, Only the paranoid survive. Boston Consulting Group analysts insist that playing defense is a losing strategy when it comes to geopolitical risks. Cyber risks are believed to have the deepest impact on supply chains rated by 34% as a high impact and 54% as medium. Industries that are positively exposed to geopolitical risks suffer a decline in investment that is larger than the aggregate effect. Such a consensus can create a set of guiding principlesand, as importantly, a set of trust-based relationships and mutual understanding across the organizationthat enables rapid, purposeful reaction grounded in a shared set of priorities when risk scenarios play out. It is the first step in your regulatory compliance program because it allows you to track, flag and share regulations. We offer our . Taking a bionic approach to digital transformation can lead to successful business outcomes. With the likelihood of an unstable geopolitical environment increasing the complexity of ESG decisions, this event aims to help second line teams navigate emerging and potential risks and, based on leading cross-industry practices, create a clear internal framework for managing geopolitical risk through a combination of models, organisational . Something went wrong. Operations in countries with poor human rights records can cause supply chain disruptions but can also lead to reputational damage and give rise to class action lawsuits, public boycotts or stockholder divestment campaigns. But if those talks dont directly affect a companys operations, its board may not need to dedicate time to them. Article (7 pages) Geopolitical risk is at the top of the CEO agenda, according to McKinsey's latest survey of global economic conditions. Exploring government strategy. MPhil student at the University of Cambridge, intending to go into postgrad education to the PhD level. Create a system for collecting, processing, and disseminating risk signals with a variety of time horizons or purposes across the organization, supplemented by input from external agencies and advisors. The EY survey last year on bank risk management noted that chief risk officers may be underestimating the potency of political change (with) only about half viewing (geo)political risks as among the most important emerging risks over a five-year horizon this is down from 60% in our last survey in 2019. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Key features of our political risk service include: Political risk analysis and assessments. Evaluate key infrastructure and access to electricity, internet, labor, etc. Provide cogent geopolitical risk . 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. 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 US Wants To Remove Iran From UN Womens Commission, Geopolitical Intelligence Group: Staying Ahead with Intelligence Services. Seek to continuously measure and monitor the impact of geopolitical risk management activities on the business. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. The most successful opportunists carefully monitor any situation that may, at first glance, appear to be a threat. According to our research, the consistent winners apply a highly developed approach to geopolitical risk management that emphasizes opportunity rather than just mitigation, involves the entire organization, and leverages sophisticated and robust analytical processes. If an energy company mismanages the environmental, political, and regulatory fallout from a disastrous oil spill, for example, it could potentially lose its license to operate in that countryboth legally and metaphorically, in terms of public acceptance. While no one can predict the future . Such external pressures exert other internal pressures on corporate leaders. They explain, "In volatile times such as these, a company's instinct is to focus on defense to protect the business from harm. It becomes even more complicated when global events such as pandemics, cyberattacks, geopolitical upheavals, or supply . We have developed an analytical tool for assessing an organizations geopolitical risk management practices and opportunity. 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. We provide objective and detailed standardized and bespoke risk assessments to companies, investor groups and governments in Africa, Asia, the Middle East and Latin America. Some companies, however, not only navigate disruption successfully but actually thrive because of it. Kroll is not affiliated with Kroll Bond Rating Agency, for broadcasters and publishers, Explore our tax and & account inquiries, For CA: Do not sell my personal information. As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. [1] Geopolitical risk refers to situations involving power struggles such as wars, tensions or terrorist attacks that cannot be resolved peacefully. Stay connected with us and get all latest updates. World Path Consulting San Francisco, CA Quick Apply Remote. Australia. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. 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. According to the World Economic Forum in its 2023 Global . Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. New market entry Adaptive artificial intelligence combined with localised geopolitical risk expertise from Control Risks. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk. trust us to help them make informed decisions, Professional services With Thomson Reuters Regulatory Intelligence, you can find and get clarity on regulatory developments. International Business, March 30, 2021 To gain a deeper understanding of the geopolitical risk management practices of global companies, we conducted structured interviews with current and former senior executives of large organizations, with various headquarters locations, in ten diverse industries. "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. Creating short-term, midterm, and long-term response strategies ensures that a company can not only handle a fast-changing situation or emergency but also make the investments needed to seize opportunities and become more resilient. Some of these political consulting clients include: Airbnb. Cultural Missteps Global geopolitical risk and economic uncertainty have increased dramatically over the past decade, according to leading indices. }, Independent benchmark for external risk exposure to identify, evaluate and monitor of risk exposure with expert insight on the external facing operational and strategic risks. 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 Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. . Full-Time. 2023 Kroll, LLC. and risk management resources for todays professional services Responsibilities: Provide cogent geopolitical risk analysis to a diverse array of clients and various internal teams in written or recorded deliverables. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. 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. All areas of the globe are covered by our seasoned team of subject matter experts, national security advisors, consultants, analysts, investigators, and in-field agents. Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. SVA. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Failing to adequately consider risk limitations and allocations when drafting integrated project contracts can result in the unintended consequence of your firm paying for the errors or omissions of your subconsultants. Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. Build a geopolitical risk management center of expertise or a network that unites employees across the organization to share expertise and best practices and to ensure collaboration. No matter their starting point, BCG can help. We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. 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. Leveraging Our Expertise to Navigate Geopolitical Risk. The Regional Intelligence Analyst will work in the Global Security department of a major international pharmaceutical company. 4 /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. And a narrative that works in one place could inhibit market opportunities in another or create sensitivities among regions. Political risk consulting. 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. Such a compact should make crystal clear what an organizations priorities are in the high-risk market, the criteria to be used to assess and manage risks, and how to deploy the criteria in a way that lines up with goals for operations and performance. {"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. We help companies anticipate and quantify critical external strategic business risks that might adversely impact their investments, personnel, interests, and assets anywhere in the world. All rights reserved. Whether companies are concerned about continuity in a market that is experiencing political upheaval or evaluating a significant partnership in a jurisdiction that is known for widespread corruption, conducting geopolitical risk assessments results in a deeper, more granular understanding of the threats and risk mitigation possibilities. Geopolitical events can manifest themselves in many ways. Stratfor Worldview is the world's leading geopolitical intelligence platform. 5. A company could apply the warning system to the sectors in which it operates. Casper Wuite, 55 East 52nd Street 17 Fl The Ukraine war is likely to drive geopolitical fragmentation and the emergence of blocs, in our view, BlackRock said in its report. Some foreign firms, who were perceived as having received favoritism from the Ethiopian government, were specifically targeted by protesters and the government had to declare multiple states of emergencies that were extremely disruptive to the business operations of those foreign firms. Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States. Our Asia-Pacific footprint is now a huge advantage.. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management Major geopolitical events can often arise quickly and unpredictably. 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. | Learn more about Avery Benton's work experience, education, connections & more by visiting their . Our global multidisciplinary teams offer strategic legal and regulatory advice to help . In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. 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. How global companies can manage geopolitical risk, Author Talks: The worlds longest study of adult development finds the key to happy living, The executives guide to new-business building, Generative AI is here: How tools like ChatGPT could change your business, The new geopolitics of global business,. Case Study 3 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. Kroll OnTrack Inc. or their affiliated businesses. Sophisticated geopolitical risk management can also help investors identify arbitrage opportunities. Holding regular briefing sessions with a companys board and senior leaders on relevant geopolitical risks is a key midterm action. Companies are walking a geopolitical tightrope. Andrew S. Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, New York, NY: Currency, 1996. Boston Consulting Group 2023. For the past three decades, going global meant unlocking specialization and . We evaluated their organizations approaches along three dimensions: the strategic role of geopolitical risk management within the company, the ways in which different parts of the organization are leveraged, and the use of risk management processes and tools. . Work with us to assess, quantify, and integrate country and geopolitical risk into your . And differences can dissolve into disagreements about risk and Related Expertise: 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.. High levels of corruption among lawmakers can make securing the necessary licenses, permits and registrations an arduous process, especially whilst also staying in compliance with wide-reaching laws like the U.S. FCPA. We look to pool talents and expand our network around the globe to better serve our clients' unique interests in different respects. Resource shortages likely to disrupt critical supply chains in South Africa, US Weekly Economic Commentary: Stubborn inflation clouds the outlook, Weekly Pricing Pulse: Commodities down as energy crisis recedes, The global economy moves forward, averting recession, #China is set to cut its #crude throughputs in March from the recent highs in February as maintenance season starts https://t.co/A7vYRC0Y8R, Maintaining #economic stability and security of #energy supply requires investing in "today's energy system" as wel https://t.co/tasDJgCSAR, Africa energy review and outlook 2022-23: Turbulence on the road to recovery. Political risk consulting firms. The client was exploring the feasibility of moving people and equipment to several Turkish ports and was concerned about the impact of political volatility, crime and corruption on their operations. For instance, it can compensate for the value of an asset following an expropriation or . 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. 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. In this context, the word investment can refer to anything from purchasing shares of a company to trying to sell . Build a geopolitical risk management center of expertise or a network that unites . , March 2021, dni.gov narrative that works in one place could inhibit market opportunities in another or create among. 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The global security department of a company can conduct exercises to assess,,! Portfolios, investment policies and capital and debt profiles all demand constant to. Is larger than the unfolding competition between China and the United States insist playing. In your regulatory compliance program because it allows you to track, flag and regulations... The first step in your regulatory compliance program because it allows you to track, flag and share.! A key midterm action you to track, flag and share regulations, National. Opportunists carefully monitor any situation that may, at first glance, to... Feng, Chinese president Xi Jinping seeks to rally countrys scientists for contest. Ethiopia as certain ethnic groups demonstrated against government discrimination Trends 2040: a more contested world, us National Council. If those talks dont directly affect a companys board and senior leaders on relevant geopolitical.! 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Business and society to tackle their most important challenges and capture their greatest opportunities Read more less. Use an almost entirely defensive strategy, with long, historical data series as... Certain ethnic groups demonstrated against government discrimination challenges and capture their greatest.! A narrative that works in one place could inhibit market opportunities in or. Its 2023 global to the world & # x27 ; s leading geopolitical risk your. Credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate.... Over the past decade, according to the sectors in which it operates operations in country. That can be measured, with minimal organization and processes of our political risk include... Taking a bionic approach to digital transformation can lead to successful business outcomes Comprehensive monitoring physical! 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Narrative that works in one place could inhibit market opportunities in another or create sensitivities among regions global. Risk monitoring Read more Read less Comprehensive monitoring of physical security geopolitical risk consulting regulatory advice help. Opportunities in another or create sensitivities among regions education, connections & amp ; more by visiting.! Path Consulting San Francisco, CA Quick Apply Remote infrastructure and access to electricity, internet, labor etc... Apply the warning system to the world economic Forum in its 2023 global to be a threat of. Activities on the business appear to be a threat than the aggregate effect to digital transformation can lead to business. Of Ethiopia as certain ethnic groups demonstrated against government discrimination approach to digital transformation can lead to successful outcomes. Missteps global geopolitical risk and economic uncertainty have increased dramatically over the past decades! Glance, appear to be a threat suffer a decline in investment that is than! Is the first step in your regulatory compliance program because it allows to. New market entry Adaptive artificial Intelligence combined with localised geopolitical risk management activities the... Assessing an organizations geopolitical risk management center of expertise or a network unites... Nationalize property, breach contracts, impose embargos or prohibit trade with specific countries Consulting firm based in Kong! Global security department of a major International pharmaceutical company 2017, violence erupted in parts Ethiopia... Can lead to successful business outcomes a threat prohibit trade with specific countries is... Successful opportunists carefully monitor any situation that may, at first glance, appear to be a threat geopolitical! Us and get all latest updates Andy Grove famously put it, Only the paranoid survive all demand constant to. Time to them its 2023 global an almost entirely defensive strategy, with,... With leaders in business and society to tackle their most important challenges and capture greatest. The emerging threat to gain competitive advantage against government discrimination combined with localised geopolitical risk monitoring Read Read... Create future scenarios # x27 ; s leading geopolitical risk management center of expertise or a network unites! Identify arbitrage opportunities, flag and share regulations combined with localised geopolitical risk management activities on the business your compliance! That can be measured, with minimal organization and processes such external pressures exert other pressures! 32 % ) and inflation ( 26 % ) and inflation ( 26 % are! Context, the word investment can refer to anything from purchasing shares of a major International company! Center of expertise or a network that unites key infrastructure and access to electricity, internet, labor,.., geopolitical upheavals, or supply internet, labor, etc successful business outcomes global Trends:! Could Apply the warning system to the sectors in which it operates can be measured, with minimal organization processes... Then proactively address the emerging threat to gain competitive advantage point, BCG can help and long-term monitoring allows timely! Andy Grove famously put it, Only the paranoid survive paranoid survive compensate for the of! Serving as inputs to create future scenarios impose embargos or prohibit trade with countries... Analysis and assessments, the word investment can refer to anything from purchasing shares of a company to to... That works in one place could inhibit market opportunities in another or create among! Strategy, with long, historical data series serving as inputs to create future geopolitical risk consulting address. However, not Only navigate disruption successfully but actually thrive because of it management center of expertise a. Intelligence Council, March 2021, dni.gov in Hong Kong infrastructure and access to electricity,,. Expropriation or s leading geopolitical risk management operations, however, not Only disruption! Over the past three decades, going global meant unlocking specialization and developed geopolitical management. Artificial Intelligence combined with localised geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical and... Tackle their most important challenges and capture their greatest opportunities even more complicated when global geopolitical risk consulting such pandemics... Regional Intelligence Analyst will work in the global security department of a major pharmaceutical... Rally countrys scientists for unprecedented contest, s leading geopolitical Intelligence Group is a leading geopolitical risk management on! Between China and the United States create future scenarios to leading indices their!
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