The Governance of Geopolitical Risk in 2025

“You may not be interested in geopolitics, but geopolitics is interested in you.”

In a December 2023 article, we looked at the concept of geopolitical risk in relation to corporate governance in the aftermath of Russia’s invasion of Ukraine and the revival of instability in the Middle East.

More than a year on, the international order is yet to return to something approaching post-Cold War stability and there are questions as to whether it ever will. While tensions have dampened for now between Israel and Hamas, the collapse of Assad’s regime revives the possibility of Syria’s return to civil war, which could spill over into the wider region. Attritional warfare continues in Ukraine, with North Korean troops recently joining the fray. Islamist groups and Russian mercenaries continue to operate in the African Sahel region. Finally, US-China strategic competition in various areas (access to rare minerals, microchip technology, and AI to name just a few) continues to cast a long shadow over international trade and supply chains.

It is therefore perhaps unsurprising that a survey by The Conference Board found that company CEOs ranked geopolitical risk as their main concern for 2025. Indeed, Geopolitical Strategist Tina Fordham warned in October 2024 that the international system may be slipping backward into a “geopolitical risk supercycle” after decades of relative peace that had seen widespread economic expansion and integration worldwide.

As a result, it seems that corporate boards will have to become ever-more conscious of the various intricacies of geopolitical risk if they are to navigate the increasingly volatile international environment, as global fragmentation supersedes globalisation as the order of the day.

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