5 Ways to Weather Geopolitical Uncertainty and Emerge Stronger

Worldwide, businesses continue to face upheaval from an array of geopolitical forces. Russia’s invasion of Ukraine, shifting US-China relations and tariffs, and renewed conflict in the Gaza region have placed intense pressure on supply chains and complicated market-entry plans and raised the stakes for regulatory compliance. This year at the World Economic Forum in Davos, numerous speakers from the public and private sectors underscored the urgency of these issues, emphasizing that preserving economic growth and national security often involves difficult trade-offs. The Trump administration’s particular emphasis on sanctions and financial crime prosecution will further influence business strategies and shape approaches to risk mitigation.

Governments have frequently turned to economic sanctions as a lever for shaping global events, and recent policy actions hint that this reliance will intensify. The United Kingdom and European Union, for instance, have imposed strict sanctions aimed at Russian industries that help fund the war in Ukraine. By expanding the scope and severity of these restrictions, Western nations hope to deter further escalation in the conflict. In the United States, sanctions remain a central tool, and a second Trump administration would likely use them vigorously. Although some observers speculate that Trump might lift Russia sanctions if it helps resolve the Ukraine crisis, the geopolitical situation is far from straightforward. If his administration adopts a more hardline approach to Russia or Ukraine, secondary sanctions targeting third countries that trade with both Russia and the US could become another powerful instrument for shaping economic and political outcomes.

In this uncertain climate, business leaders must make critical decisions about protecting their organizations from political volatility while seizing growth opportunities. Many have begun to revise supply chain strategies, shed higher-risk operations, and reinforce internal controls to remain compliant with rapidly evolving regulations. Yet Ukraine is only one piece of the global puzzle. All around the world, trade sanctions now top the agenda for supervisory authorities that have grown more vigilant about enforcement and oversight. Governments that once worked in silos now coordinate more closely to share data, refine regulations, and pursue enforcement actions across borders. Recent developments in the United Kingdom illustrate this heightened scrutiny: regulators established the Office of Financial Sanctions Implementation (OFSI) and the Office of Trade Sanctions Implementation (OTSI) to enhance supervision and ensure stricter compliance.

Navigating an Increasingly Complex Geopolitical Landscape

These shifts significantly affect corporate boards and senior managers steering companies through turbulent times. Many face questions about how to respond when sanctions disrupt established supply chains raise business costs, or block access to specific markets. Although the challenges can be daunting, companies that position themselves correctly may also uncover new opportunities, such as entering markets vacated by competitors that withdrew due to sanctions risks or compliance hurdles. Regulators worldwide have ramped up their efforts to promote transparency, so they expect organizations to meet higher standards and demonstrate robust controls. This environment calls for boards and senior management teams to take concerted action if they hope to thrive.

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What Boards and Senior Managers Can Do to Navigate Sanctions

Organizations often wonder how best to prepare for sanctions-related risks and how to embed that preparation in strategic planning. Leaders who address geopolitical volatility head-on can shield their companies from unforeseen disruptions and even find ways to outperform less proactive peers. Although every organization’s approach will vary, five concrete actions can prove decisive.

First, companies must clarify who “owns” geopolitical risk. Because these risks affect multiple business units and functional areas, boards must ensure that responsibility is assigned. Without proper ownership and accountability, missing interdependencies or overlooking emerging threats becomes easy. Ownership often spans compliance, legal, and risk management teams, yet boards should confirm that a single point of coordination exists to break down silos and encourage cooperation.

Second, boards and senior managers should thoroughly assess geopolitical risks and measure the potential impact on business operations, supply chains, and markets. This evaluation must be ongoing. Leaders can consult geopolitical experts and employ new technologies that provide real-time intelligence on regulatory changes, conflict zones, and other risk exposure variables. An accurate and current view of these developments allows organizations to make better decisions about where to expand, which suppliers to partner with, or when to pivot.

Third, boards must act swiftly once they understand their organization’s vulnerabilities. Decisive steps could include diversifying suppliers, exiting regions seen as too risky, or strengthening internal controls to comply with newly introduced regulations. In high-stakes environments, timely intervention can prevent minor problems from becoming major operational failures.

Fourth, scenario planning and the development of long-term playbooks become vital. Leaders can rehearse their responses in advance by mapping out a range of geopolitical contingencies, from shifts in US foreign policy to sudden embargoes on certain exports. These exercises promote resilience by helping teams adapt quickly when unexpected changes occur. Many organizations incorporate scenario planning into broader strategic reviews, aligning it with corporate objectives so they remain vigilant in both the short and long term.

Finally, companies must continually reassess geopolitical risks. This requires creating processes, often directed by boards and senior executives, for tracking policy changes and adjusting risk management programs as needed. For example, an ongoing review of financial crime controls ensures that sanctions compliance aligns with an organization’s evolving risk profile. Close oversight of existing controls can highlight gaps or redundancies, allowing companies to refine policies and reinforce training or monitoring where necessary.

Taking Early Action and Concrete Steps in Geopolitical Risk Management

Board members and executives who work to understand the current geopolitical reality—and act before it becomes an immediate crisis—can protect their organizations from sudden shocks. They might revisit global supply chain strategies, sell off businesses that create excessive risk, or redefine market-entry plans to account for prohibitive sanctions. Meanwhile, they must also upgrade regulatory compliance and risk management frameworks to keep pace with new requirements. Tools like Ascent, an AI-driven platform that unites data analytics with deep risk expertise, can help leaders identify, manage, and monitor threats across various domains.

By using technology alongside expertise and adopting a proactive, coordinated stance, businesses can turn geopolitical challenges into opportunities for strategic recalibration. This period of global uncertainty need not lead to stagnation. Although companies face rising costs and additional regulations, those that adapt early will likely become more resilient and better positioned to thrive. Boards and senior management teams that embrace this mindset will protect their organizations today and equip them for the unpredictable changes that tomorrow may bring.