Geopolitical shifts and increasing polarization

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Victor Panchak, CPP, Security Director and Partner at International SOS, explores how to shape security preparedness in the face of an ever-evolving geopolitical landscape.

The global stage

It is getting obvious that as geopolitical issues rise in our polarized world, so does the likelihood that they will affect the global operation’s performance, reputation, security and of course people.

According to the US National Intelligence Council’s Report Global Trends 2040, in the next two decades alone, competition for global influence is likely to reach its highest level since the Cold War.

That being said – now is the time for corporations to assess anew their escalating risk matrix, posed by global political and socio-economic tensions.

Managing security threats

So, how can organizations best manage complicated security threats in this geopolitically polarized world?

I am from Ukraine and on 24 February 2022 I was in my home country.

On the eve of the Russian invasion, a security survey was conducted by ASIS Ukraine in partnership with a few local organizations on business preparedness for the war in Ukraine.

The results showed quite a pessimistic picture, with 70% of more than the 100 companies that participated in the survey responding they were not ready.

Going into details of the survey, 54% of all companies did not take particular steps to prepare for the conflict; while 29% took some steps solely with their in-house resources; and it was only 5% that used external security consultants and advisors to help them get prepared.

Answering the question why, it is worth mentioning that some companies seem to be willing to respond to a crisis, rather than predicting it, which is not a solid way to run a business.

The ability to be resilient following a crisis comes back, first of all, to proper planning, where clarity on risk tolerance and risk exposure empowers and supports decision makers during the crisis management process.

Mitigating the impact

To help mitigate the impact of geopolitical risks, it’s important for leaders to first understand what that impact may look like. 

For example, does a company have to consider how political instability and disturbances affect its business operations and, say, its supply chain security?

The simple answer is yes.

The COVID-19 pandemic and the global response to its evolution demonstrated that it is proactive geopolitical risk management that has became critical for maintaining enterprise resilience and security.

That is why business leaders may also need to address the potential reputational risks and assess the impact on their financial markets and investment decisions, accordingly.

So, what are the risk management components that we would recommend to essentially take into consideration?

According to the International SOS 2023 Risk Outlook, these should include, but not be limited to, the following:

  • Understanding the organization’s unique risk profile and vulnerabilities in geopolitical shifts
    • This is critical, as a unique risk profile has to be fundamentally aligned with the company’s mission, vision and values

  • Early warning systems have to be in place to foresee how emerging risks shift from global to local
    • It’s suggested businesses utilize external providers, helping to identify complex risks, assess and prioritize them

  • Anticipate potential crisis decisions as part of strategic crisis management planning
    • Business continuity plans should be empowered by the enterprise security risk management’s approach
  • Educate employees on risks and ways to mitigate them
    • Security training, awareness programs, e-learning and table-top exercises should be prioritized

So, the business needs to leverage decision intelligence to navigate through and mitigate the impact of geopolitical risks, as this is key to ensuring that the information it possesses is accurate and informative.

Security approach in managing geopolitical risks

The Russia/Ukraine and Israel/Hamas conflicts have been the defining security issues in 2023 and will probably continue to remain critical in 2024.

Geopolitics and the threat of state versus state conflict is back on the corporate risk agenda.

While any far-reaching impacts of these conflicts will remain key features of the global risk environment in 2024, one thing that is already apparent is that it is only a combination of hard-powers and soft-powers that may help balance geopolitical risk.

That being said, it is suggested that business use a simple two-step model to manage geopolitical risks, namely:

  • Get the leadership “buy-in”: many leadership teams are already trying to assess geopolitical risks to one degree or another, but their discussions are usually focused on a particular project or investment. Consequently, they do not examine the broader strategic security landscape. For example, for many companies the strategic business development in eastern Europe, or at any other emerging market – is a very solid growth opportunity and it will definitely top the list of standing risk issues to discuss in the future. So, a leadership team should begin such conversations with a baseline security risk assessment that includes at a minimum the following:
    • How to get here: historical context of relations
    • Where we are now: applicable knowns and unknowns
    • Where we are headed: key watchpoints to monitor
    • What to do next about it: implications of the risk analysis
  • Use a professional consultancy to assess potential geopolitical risks and their impact
    • They will help business be better prepared to respond to geopolitical risks across multiple time frames. Also, with their help, creating your customized short-term, mid-term and long-term response strategies will ensure that you can not only handle a fast-changing situation or emergency, but also make secure investments needed to handle new opportunities and become more resilient

In a nutshell…

While the long-term effects of global events like the conflicts in Ukraine and Israel, or the future of the US-China relations, are still unclear, geopolitical tensions will put business security at significant risk.

Rephrasing the quote of a former Intel CEO Andy Grove that only the paranoid will survive, with tectonic shifts in geopolitics, rumbling from the Ukraine/Russian and Israel/Hamas conflicts, China’s re-emergence on the global scene and unpredictable climate change, companies must constantly be on guard.

They should regularly look up from tending to immediate needs of their operating environments to learn, adapt and prepare for external and internal shocks.

About the author

Viktor Panchak is a Security Director and Partner at International SOS and a senior corporate security consultant.

He has more than 25 years of successful career experience in both public and private security, safety, consultancy, as well as business administration and commercial management.

Panchak is also a graduate of Georgetown University in Washington DC, and the first Ukrainian professional who received the highest global security CPP certification (Certified Protection Professional).

Additionally, he is the Regional Vice President (Region 9E) and Steering Committee member at ASIS Professional Development Community.

The views expressed by our contributors are not necessarily the views held by Centurian Media. 
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