Geopolitical instability, shifting alliances, and the retreat from global consensus are forcing companies to reassess long-standing assumptions about how and where they operate.
In an environment shaped by trade tensions, fragmented regulation, and competition for critical resources, risk management strategies that once supported global growth are becoming less effective.
Luke Withers, UK industry verticals leader and global client advocate at Lockton, outlined the realities facing C-suite executives in this new environment. From changing global alliances to supply chain shocks and regulatory divergence, Withers said the business landscape is undergoing a fundamental reset.
“C-suite executives must accept that a fundamental change has occurred in geopolitics,” he said. “Economic systems and current fundamentals are not insulated from this and will also undergo drastic realignment.”
Withers described the post-1989 period as a time of unipolar dominance led by the United States. While he noted that “the US’ power hasn’t significantly waned,” he said “we have entered a new and multipolar world—driven by the expansion and challenge of other world powers.”
This shift has prompted a call for companies to rethink not only how they identify risks but also how they seize new opportunities.
“Remaining agile and adaptive in a polarised world will be a precondition for success going forward,” Withers said.
Businesses accustomed to stable global frameworks now face mounting disruption. “The existing generation of business leaders has matured in a period of relative certainty,” Withers said, adding that “it may be difficult for some to adopt a new mindset that successfully weathers uncertainty.”
He urged C-suite leaders to expand their capabilities, including bringing in independent contractors, consultants, and non-executive directors who can offer broader perspectives and insights on differing political views and regional spheres of influence.
“The shock of the COVID-19 pandemic, for example, surprised many companies as they discovered how precarious and vulnerable their supply chains were,” he said. “Trade frictions and military conflicts associated with the new geopolitical landscape may exacerbate existing issues and present new risks and exposures.
“A singular global approach to business and risk may need a rethink,” Withers said. “Companies will need to consider how business models need to adapt to the demands and political realities of the various geographies their operations and customers are based in.”
He also acknowledged that “a granular realignment of business operations by territory requires resources that most businesses are currently not devoting.”
Leaders, he said, “need to allocate appropriate corporate headspace to efficiently strategise how they minimise their risk and seize the opportunities that present themselves.”
Traditional trade routes are also being reshaped, raising questions about future commercial flow.
“Sound risk management will consider the reliability of existing trade routes and potential diversification to limit risk, where possible,” Withers said.
Withers noted the Belt and Road Initiative (BRI) and its counterpoint, the India-Middle East-Europe Economic Corridor (IMEC), and highlighted the emerging relevance of the Arctic due to climate change.
“Companies trading within the northeast Pacific area could look to conduct commerce via this corridor and reduce transit times and fuel costs,” he said.
Still, geopolitical implications remain: “The introduction of this route could potentially hand Russia leverage over states and companies.”
Withers also explained that divergent regulatory trends across regions are making uniform compliance more complex.
“Universal/global programmes could become dated as nations adopt divergent regulations for various issues,” he said, referencing the divide between the US and Europe on ESG matters. “A static response may leave organisations behind the curve.”
“Most multinationals will need defined priorities on conducting business between Europe and the US. Stressors such as these will require C-suites to examine how business structures operate both within local regulatory frameworks and a globally competitive marketplace.”
Withers also addressed the role of artificial intelligence as a geopolitical battleground.
“It is widely accepted that the scale of energy and resources required to dominate and expand in this space can largely only be achieved at a government scale,” he said. “While smaller countries, such as the UK, may not have access to the cheaper energy or fiscal stimulus of larger nations, there is still a part to play for all states.”
As businesses operate across more volatile political and economic environments, Withers emphasised the importance of localising risk awareness.
“The perception of risk will change significantly depending on geography,” he said. “For some businesses, the concept of universal/global risk and mitigation strategies may now be redundant.”
He advised that “regional risks are assessed in a consistent way to ensure comparability” and that “organisations need to regularly review risk information articulated in risk registers to ensure changes in the risk profile are captured in a timely manner.”
Crisis management strategies, Withers warned, must also be re-evaluated. “Stress testing crisis management plans may be necessary due to the accelerated pace of geopolitical events—potentially requiring a quicker and more elaborate response,” he said. “It may be more complicated to create a consistent global public response in a polarised world.”
“It is critical that boards and risk managers educate themselves on this new reality and ensure that they are monitoring and reviewing the volatile political landscape,” Withers said.
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