Six Secrets to Staying Ahead of Geopolitical Risk in Business

Sun Tzu once wrote, “In the midst of chaos, there is also opportunity.” How can leaders find hope and opportunity in the midst of today’s growing global disruptions?

For businesses operating in today’s volatile marketplace, geopolitical risks have moved from background noise to boardroom priority. Whether it’s trade wars, military conflicts, new regulatory regimes, or diplomatic breakdowns, international business leaders are finding that geopolitical factors now influence everything from supply chain continuity to investor confidence.  

The World Economic Forum’s 2024 Global Risks Report identified “geoeconomic confrontation” as one of the top threats facing businesses over the next decade. Other emerging risks, explored in our Leadership in Polycrisis Report, include tighter monetary policies, disruptive technologies, increased cybercrime, and extreme weather events. The cost of living will continue to rise, investments will decline, and high debt will become an increasingly significant challenge.  

Angela Westdorf, Managing Partner at Signium in Cologne, Germany, says,

“The stakes are high, the pace is fast, and the need for informed, agile leadership has never been greater. Geopolitical risks can significantly reshape market access, disrupt operations, and drive costs up overnight. For businesses that remain unprepared, any one of these factors could spell disaster. But how does one prepare for so many potential points of failure?” 

What are today’s most common geopolitical risks? 

According to the World Economic Forum’s report, 54% of the experts surveyed expect some instability and a moderate risk of global catastrophe within the next two years, while nearly two-thirds foresee a more turbulent outlook over the next decade. For leaders navigating such uncertainty, factoring geopolitical risk into executive decision-making has become a strategic necessity.  

Westdorf comments: “With so much going on, the C-suite’s biggest challenge is knowing where to look for the next threat, and preparing for numerous possible outcomes. Short of being a modern-day Nostradamus, today’s leaders must make calculated predictions while remaining fast on their feet in the face of sudden change.”  

Although the future presents an infinite number of complex possibilities, leaders can focus on these four primary domains, where the greatest risks lie.  

Political instability 

Political upheaval in key markets can destabilize investment climates, threaten employee safety, and sever operational continuity. A striking example is the 2023 military coup in Niger. Armed military forces overthrew the elected government and took control of the country, triggering regional tensions, border closures, and the threat of further conflict. In response, many foreign companies operating in Niger’s mining and energy sectors were forced to suspend operations and evacuate staff.  

The recent Trump–Musk feud provides a timely example of how executive-level politics can impact business outcomes. In June 2025, a public dispute erupted between US President Donald Trump and Tesla CEO Elon Musk. The result? Tesla shares plummeted approximately 14% in a single day, erasing roughly $150 billion in market value. 

This episode highlights a crucial lesson: geopolitical risk isn’t limited to countries; it can also emerge from political dynamics within domestic markets. Westdorf comments: “Global leaders must remember that political risk isn’t just something that happens ‘out there.’ It’s important to stay aware of shifting dynamics at home, too.” 

Trade policies and tariffs 

As we’ve seen with the US-China trade war, tariffs, sanctions, and trade restrictions have become common methods that countries use to protect their own interests. However, it’s not only China and the US implementing these new strategies.  

India’s recent “Make in India” campaign highlights how trade policy presents new geopolitical challenges. By introducing higher tariffs on imported goods and offering incentives to local manufacturers, India’s government aims to boost domestic production and reduce its reliance on foreign imports. For multinationals that depend on Indian sourcing or use the country as a manufacturing hub, these changes have led to rising costs and new operational pressures, prompting many to reconsider how and where they produce goods for the Indian market. 

In South America, Argentina’s ongoing economic turbulence has created growing uncertainty for global firms. Following the 2023 election of President Javier Milei and his sweeping economic reform agenda, businesses have faced tighter restrictions on moving capital and converting currency. This has prompted international companies operating in Argentina’s vital agricultural and lithium sectors to reassess local exposure and long-term investment strategy. 

Regulatory changes 

For global businesses, keeping up with changing regulations is becoming a challenge in itself. “Rules around environmental impact, data privacy, and labour laws are changing quickly,” says Westdorf. “The problem is that they don’t always align from one country to the next. What’s legal in one region might be restricted in another.” 

For example, one area seeing growing complexity is data privacy, a subject under constant global scrutiny. New laws are reshaping how companies manage information. China’s Personal Information Protection Law (PIPL) and the European Union’s General Data Protection Regulation (GDPR) both require stricter controls on how data is stored and shared across borders.  

Westdorf shares her thoughts: “As a result of new data privacy regulations, many multinational businesses are being forced to redesign systems, update processes, and expand compliance teams just to keep up. It’s complicated and expensive, but the cost of getting it wrong can be much higher.”  

Geopolitical conflicts 

Military and economic conflicts, whether between nations or within them, pose grave threats to business stability. Some of the most recent examples of how conflict impacts the economy include:  

• Russia’s invasion of Ukraine triggered an energy crisis and led over 1,000 Western companies to exit the Russian market. 

• Conflict in the Red Sea has disrupted shipping routes via the Suez Canal, increasing logistics costs for global trade. 

• Rising tensions between China and Taiwan have raised supply chain risks for companies that rely on Taiwan’s semiconductor industry. 

• The US-China trade dispute continues to impact technology exports, with tariffs and restrictions inflating costs across multiple sectors. 

• Civil unrest in Sudan has disrupted energy operations and humanitarian logistics, prompting companies to withdraw or suspend activity. 

Six leadership secrets for navigating geopolitical risks 

As geopolitical risks escalate, boards are beginning to treat them not as episodic threats but as long-term strategic considerations. Forward-looking companies are integrating geopolitical expertise into governance structures, either through specialized risk committees, advisory boards, or regular consultation with international affairs experts. This board-level awareness ensures that major decisions are evaluated through a geopolitical lens.  

For the C-suite, this means building closer alignment with directors on how to frame, monitor, and act on emerging risks that may once have seemed far removed from day-to-day operations. 

1. Visionary leadership keeps the bigger picture clear 

A company’s values and purpose are guiding lights in times of crisis. When geopolitical shocks hit, teams grounded in shared principles can act decisively and responsibly. Their purpose is more than just a tagline; it becomes a compass. It tells them what’s right to do, even when the exact path is still unclear, and ensures business continues without sacrificing integrity. 

When Russia invaded Ukraine in 2022, Pfizer took a bold, purpose-driven stand. The company paused new investments and clinical trials in Russia but continued to supply life-saving medicines. It then committed to donating the profit from its Russian subsidiary to support humanitarian relief in Ukraine. 

The pharmaceutical giant committed to channeling millions of dollars through the Pfizer Foundation, funding NGOs in Ukraine and neighboring countries. This includes healthcare, displaced person support, and essential medical supplies delivered directly via humanitarian avenues. According to Sally Susman, Executive Vice President and Chief Corporate Affairs Officer at Pfizer, “We didn’t want to just take a business-as-usual approach and carry on as if nothing had happened.” 

This is playing the long game. Instead of walking away at the first sign of a geopolitical crisis, Pfizer balanced ethical responsibility and business resilience by aligning its actions with its values. 

2. Monitoring and keeping an outside-in perspective is a skill 

The pace of geopolitical change is relentless, and relying on headlines or instinct alone isn’t enough. Leaders need structures that keep them informed, but they also need perspective that challenges their blind spots. 

That’s where outside-in thinking becomes critical. Working with academic institutions, think tanks, and specialist advisors provides leaders with access to regional expertise, scenario modeling, and early signals that may not be fully apparent in mainstream media. While no one can predict every plot twist, being able to pivot with clarity comes with being prepared for the unexpected. 

“One would never have thought that staying informed is an executive skill,” says Westdorf. “But when leaders know what’s happening in the world around them, and understand how it might affect their people and business operations, they’re already two steps ahead in navigating potential crises.” 

3. Scenario planning is an integral part of business 

In the words of B.C. Forbes, a financial journalist and founder of Forbes Magazine,“Business, more than any other occupation, is a continual dealing with the future.” 

C-suite leaders must prepare for the unpredictable. Scenario planning enables teams to model best-case, worst-case, and most-likely outcomes across different geopolitical developments. Yet, according to PwC’s Workforce Strategy Benchmarking Survey, only 26% of companies say they always take a scenario-based approach to their strategic planning. 

Scenario planning works best when it’s built into the regular rhythm of business decisions. It needs input from across departments, like finance, supply chain, and legal, so that when a crisis hits, everyone knows the plan and how to act on it. Westdorf comments: “Scenario planning is a lot of extra work,” says Westdorf. “It’s easy to delay or downplay – until the day you need it. Then it becomes the most important work you’ve done.” 

4. Supply chain diversification safeguards against disruption 

Over-reliance on a single country or supplier places businesses at greater risk of supply disruption. As an example, Apple has taken clear steps to diversify its manufacturing footprint in response to growing tensions between the US and China. India, Vietnam, and Malaysia have emerged as key partners, not just as alternative production hubs, but as fast-growing economies with the infrastructure and talent to support global operations. 

For Apple, the shift reduces geopolitical exposure and adds agility to its supply chain. For these new partnering regions, it brings employment, investment, and the transfer of skills and technology.  

“Apple hasn’t necessarily created a perfect solution,” says Westdorf. “But it reflects how smart business strategy can align with broader economic development, and even unlock entirely new opportunities that may never have come to fruition without the external pressure.”  

Companies are also exploring nearshoring and “friend-shoring” – relocating supply networks to politically aligned or geographically closer partners. 

5. Flexible business models respond to crises faster 

When conditions shift drastically, businesses need to adapt, and it usually needs to happen quickly. Flexible models allow companies to rearrange teams, product lines, or delivery channels without starting from scratch. For example, tech companies use cloud systems to stay online even when local disruptions hit. In retail, brands are setting up more local fulfilment hubs to reduce reliance on cross-border deliveries. 

Flexibility also matters when it comes to people. Visa rules, sanctions, and travel restrictions are making it harder to move key talent across borders, especially in leadership, engineering, and project-critical roles. For global businesses, planning for talent disruptions is now just as important as managing supply chains. That means building local pipelines, investing in remote-ready systems, and factoring mobility risks into every major project. 

6. Engaged stakeholders help to see what’s coming 

When geopolitical pressures rise, it’s often external stakeholders who hold the keys to continuity. From government officials and regulators to industry coalitions and local communities, these relationships can shape how smoothly a business navigates change, or whether it can operate at all. 

Staying close to these stakeholders gives leaders early insights into policy shifts, regulatory changes, and sentiment on the ground. However, it’s more than just staying informed. It’s about being part of the conversation. Leaders who invest in trust and transparency with stakeholders before a crisis are far better positioned to act with confidence when tensions escalate. 

Learning the supreme art of war (and risk management) 

In yet more wisdom penned by the great military general, Sun Tzu, “The supreme art of war is to subdue the enemy without fighting.”  

“Geopolitical risk isn’t going away,” concludes Westdorf. “In fact, it’s becoming more pervasive, more complex, and more influential in shaping business operations. But it’s not insurmountable. If we have to ask ourselves what the supreme art of risk management is, it’s in preparing ways to navigate change and crisis without resorting to knee-jerk reactions that potentially do more harm than good. Ultimately, every supply chain disruption or regulatory hurdle has people on the other side: workers, families, and communities. Geopolitical decisions may begin with governments, but their consequences ripple through lives.” 

While geopolitical challenges may be unavoidable, leaders who are ready will find that every risk is a doorway to developing resilience, establishing long-term advantage, and finding better ways of doing good business.