Join hosts Dr. Ian Oxnevad and Chris Mason as they highlight the 2024 season of Riskology by Infortal.
The Growing Importance of Geopolitical Risk
In 2024, geopolitical risk has increasingly taken center stage in boardroom discussions. Companies are recognizing the complex interplay between global events and their business operations. Firms increasingly acknowledge the need to integrate geopolitical risk management into their corporate strategies and compliance programs.
Board members have also shown a growing interest in geopolitical risk, understanding that global events can have substantial knock-on effects on their operations. This shift is particularly vital given the recent impact of geopolitical events and conflicts worldwide.
By establishing dedicated teams and intelligence networks, firms are now better positioned to consider geopolitics in strategic decision-making and everyday operations. This shift in focus demonstrates that geopolitical risk management is no longer a niche concern but a critical element of corporate governance.
The Reality of Geopolitical Risk
Companies must be vigilant and adaptable, as geopolitical events directly affect global supply chains, market stability, and business continuity.
Establishing robust risk management frameworks that include geopolitical considerations is beneficial and necessary for navigating the current global risk landscape. The lessons learned in 2024 remind businesses to continuously update their risk assessments to reflect the ever-changing geopolitical environment.
The Importance of Risk Intelligence and Due Diligence
An increasingly complicated global risk environment requires understanding your risk exposure and spotting emerging risks before they threaten your business.
This requires tapping into the right intelligence to unpack hidden risks.
This also means conducting due diligence, including geopolitical risk analysis, when making significant investment or operational decisions.
The Election Impact and the Surge of Populism
The election cycle of 2024 was one of the most dramatic and consequential in recent memory.
Over half the world went to the polls, with significant political shifts across various regions. In the Western Hemisphere, there’s been a notable surge in populism, driven by the perception that mainstream institutions and political bodies have fallen out of touch with the average citizen.
Post-election change is on the horizon, and it will impact geopolitics as new regulations, tariffs, and sanctions emerge.
International Trade and Supply Chains
As we transition into 2025, one of the critical questions centers around the stability and functionality of international trade and supply chains. The disruptions witnessed in recent years due to geopolitical tensions and global conflicts have necessitated reevaluating supply chain strategies.
The reshaping of global trade routes and supply chains due to geopolitical tensions has underscored the need for both nearshoring and reshoring. Nearshoring—moving production closer to home markets—offers numerous benefits. This trend is being driven by:
- Cost Reductions: Savings on shipping and logistics.
- Supply Chain Resilience: Mitigating risks associated with international disruptions.
- Speed to Market: Faster delivery times and reduced lead times for new product launches.
Reshoring, bringing manufacturing back to the company’s original country, is also gaining traction. This is particularly relevant in industries facing stringent regulatory requirements or where operational control is critical. The economic landscape is visibly shifting, with governments incentivizing domestic production through subsidies and tax breaks.
Preparing for 2025 and Beyond
As we prepare for the economic and regulatory realities 2025, businesses must prioritize adaptability and foresight. Navigating this evolving landscape requires a proactive approach. As new geopolitical developments emerge, staying informed and prepared will be key to sustained success.
We hope you join us for the latest episode of Riskology by Infortal.
Read full show notes at Infortal Worldwide
Resources:
Dr. Ian Oxnevad on LinkedIn
Chris Mason on LinkedIn
