Question

The need for board-level strategic conversations on geopolitical risk is urgent

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On Feb. 24, McKinsey & Company reported Russia's invasion of Ukraine in February 2022 triggered more than 1,000 companies to curtail their operations in the world's 11th biggest economy, revealing an imperative for global firms to bolster their ability to anticipate geopolitical risk and build resilience. The global order still reels from disruptions related to the war in Ukraine, including those in energy, food security, supply chains, and more. A central concern among global CEOs who speak with us is whether and how they will contend with additional geopolitical ruptures when they occur. As Japan's prime minister, Fumio Kishida, stated at the 2022 Shangri-La Dialogue global security forum, Ukraine today may be East Asia tomorrow.

In between navigating the fallout from Europe and unfolding strategic competition in Asia, multinational corporations must also manage a host of long-tail political risks and conflicts across other geographies, including Africa and South Asia.

Even as boards and CEOs work to build capabilities in managing such risks and developing geopolitical resilience, the imperative to lift one's gaze and look around the corner has become key to strategy and performance. Can CEOs manage global risk in a highly dynamic World? Do they have the knowledge and time to navigate unfamiliar terrains?

Answer 1

The need for board-level strategic conversations on geopolitical risk is urgent. CEOs need to manage global risk in a highly dynamic world and have the knowledge to navigate unfamiliar terrains.

Step-by-step explanation:

The need for board-level strategic conversations on geopolitical risk is urgent. The COVID-19 pandemic and the war in Ukraine have disrupted the global economy, causing issues such as the disruption of supply chains, labor shortages, and banking strain. Global CEOs are concerned about how to manage geopolitical risks and develop resilience in a highly dynamic world. It is crucial for CEOs to have the knowledge and time to navigate unfamiliar terrains and make informed decisions.