Deep Dive: The Geopolitical CEO

The Geopolitical CEO: Executive Strategy in a Fragmented World

TL;DR:
Geopolitics has become a defining force of global business. The era in which CEOs could treat political risk as an external variable is over; trade, technology, energy, and capital flows are now shaped directly by geopolitical power dynamics. This shift is structural, not cyclical, and it fundamentally alters how strategy, governance, and leadership must be approached.

For today’s CEOs, success depends on the ability to operate under persistent uncertainty. Linear forecasting and efficiency-only optimization no longer suffice. Instead, companies must build resilience through diversification, scenario-based strategy, and institutionalized geopolitical insight. Leadership now requires sensemaking, rapid decision-making, and the capacity to align organizations around clear direction despite incomplete information.

Geopolitics is not only a source of risk but a source of advantage for those who anticipate change early and act decisively. In a fragmented global order, the CEO’s role expands from operator to strategic navigator—shaping outcomes rather than reacting to them.

The Geopolitical CEO: Leadership and Strategy in a Fragmented Global Order

In boardrooms around the world, a stark new reality has dawned: geopolitics is no longer a peripheral concern or occasional disruption—it has become a central operating force that shapes markets, supply chains, and corporate destiny. After four decades of expanding globalization, CEOs now face an environment defined by fragmentation, volatility, and power politics. Trade wars, sanctions, and even shooting wars are rewriting the rules of business in real time. As one analysis put it, “four decades of free-market orthodoxy” are giving way to a modern resurgence of economic nationalism reminiscent of the 1930s, complete with tariffs, trade barriers, and mercantilist policies. This shift has been abrupt and deeply consequential. In January 2026, the World Economic Forum’s Global Risks Report highlighted “geoeconomic confrontation” between major powers as the top global risk, eclipsing even armed conflict. In other words, economic tools have become weapons and the stability that businesses once took for granted is evaporating.

For corporate leaders, these trends signal a paradigm change. The post-Cold War era of relatively predictable rules and ever-deepening integration is over; a more fragmented global order has emerged. This chapter examines how we got here—tracing the macroeconomic, historical, and institutional forces that have put geopolitics at the center of business strategy. It explores why the assumptions of a stable, rules-based international system no longer hold, and how events from the past few years have shattered complacency. From a resurgence of great-power rivalry to the weaponization of trade and finance, we outline the forces that are reshaping the playing field for CEOs and requiring them to fundamentally rethink how they lead.

I. From Globalization to Fragmentation: The Return of Geopolitics in Business

For much of the late 20th and early 21st century, corporate strategy could largely assume a benign global context. Markets were opening, supply chains stretched across continents, and political considerations often took a back seat to efficiency and growth. That world is now unravelling. The “old international order” of relatively free trade and cooperative globalization is fracturing, as even governments openly warn businesses to prepare for instability. Recent years have brought a cascade of geopolitical shocks and shifts: a trade war between the United States and China, Russia’s invasion of Ukraine, renewed conflict in the Middle East, and an era of great-power competition over technology and resources. Each event has underscored that geopolitics is business—capable of destroying billions in value or creating new winners overnight.

A Fragmenting World Order. The broad trend is clear: the tide of globalization has turned, giving way to fragmentation and rivalry. Cross-border economic flows remain large, but they are increasingly shaped by strategic alliances and tensions. The World Economic Forum’s 2025 risk survey found that global experts rank geoeconomic conflict—tariffs, investment controls, export bans—as the number one short-term risk, reflecting the belief that “economic policy tools” are now being used as “weaponry rather than a basis of cooperation”. Businesses are witnessing what one commentator called a “geopolitical risk supercycle,” after decades of relative peace and integration. In practical terms, this means CEOs must navigate a world of blocs and barriers: competing regulatory regimes, contested tech standards, and sanctions or trade restrictions that can split global markets into separate spheres.

Data on global economic policy bears out the scale of change. Trade relations have become markedly more politicized. Tariffs between the U.S. and China have risen roughly sixfold since 2017, reversing a long trend toward liberalization. Overall, government-imposed trade interventions (tariffs, quotas, export controls, etc.) have surged twelve-fold since 2010. These are not minor adjustments at the margins—they represent a structural break from the past. Meanwhile, industrial policy is back in fashion: governments worldwide are pouring trillions into subsidies and domestic investment incentives, from the U.S. Inflation Reduction Act to Europe’s Green Deal and China’s strategic sectors. The number of policy actions to promote domestic industries (and often exclude or disadvantage foreign rivals) jumped nearly 390% between 2017 and 2024. National security reviews of cross-border investments have tightened as well: for example, in 2023–24 the United States’ foreign investment oversight body issued more penalties than in the previous five decades combined. These indicators all point to a more fragmented playing field where state power intrudes on commerce to an extent not seen in a generation.

Historical parallels are hard to ignore. Commentators have likened today’s climate to a mix of the 1930s and the Cold War. The 1930s analogy refers to beggar-thy-neighbor trade policies and economic nationalism; indeed, we see echoing patterns as major economies raise tariffs, impose export bans on critical minerals or semiconductors, and jockey for self-sufficiency. The Cold War parallel comes from the emergence of rival blocs and zero-sum competition, especially between the U.S. and China. The bifurcation of technology ecosystems (e.g. separate spheres for 5G networks or internet governance), restrictions on tech transfer, and the concept of “friendshoring” supply chains to politically aligned countries all suggest a world where political alignment determines who trades with whom. UN economists warn that without conscious effort, we risk “global fragmentation” into isolated trade blocs, which could undermine growth in the long term.

Crucially, these geopolitical currents directly affect corporate performance. The war in Ukraine was a brutal wake-up call: hundreds of multinationals had to abruptly exit Russia in 2022, leading to an estimated $170 billion in asset write-offs and losses. British energy giant BP alone wrote off $25.5 billion when it divested its Russia holdings virtually overnight. Beyond the humanitarian and ethical dimensions, these events carried a simple message for CEOs: a single geopolitical event can upend years of investment and strategy. Similarly, U.S. export sanctions on Chinese tech have cost companies like Huawei an estimated $30 billion per year in lost smartphone revenue. Regulatory divergence is forcing difficult choices too—consider how social media firm TikTok faces a potential forced divestiture in the U.S. due to national security concerns while continuing business as usual in Europe. Conflicting national rules mean companies can no longer assume a unified global market; they must adapt to divergent regimes or risk being caught in the crossfire.

Even the macroeconomic picture is clouded by political risk. CEO confidence in the global economy has been knocked back to levels last seen during crises. In late 2025, amid “ongoing geopolitical volatility,” CEO optimism in the global economy fell to its lowest point in five years. In an EY survey, 57% of global chief executives said they expect today’s geopolitical and economic uncertainty to persist for the foreseeable future. Instead of hoping for a quick return to normal, many now presume volatility is here to stay. As the EY report noted, the world economy is “fracturing”, and in response CEOs are “rewiring operating models—building local and regional capabilities closer to customers” to cope with diverging government policies and markets. In short, localization and regionalization are becoming strategic imperatives as global integration recedes.

All of these shifts underscore a fundamental point: geopolitics has muscled its way from the background to the foreground of corporate strategy. Business leaders can no longer treat political risk as an occasional tempest to be ridden out; it is a constant ocean current that will determine which way their ships can sail. The next chapter will examine how CEOs and boards have awakened to this new reality. After years of focusing on efficiency and growth above all, corporate leadership is now grappling with the demands of a world where political sensemaking, strategic resilience, and values-based judgment are as vital as the next quarter’s earnings. How are leading companies responding? What changes are unfolding in boardrooms and C-suites as executives recalibrate for a geopolitically charged era? We turn now to the strategic implications and organizational adaptations that define the Geopolitical CEO.

II. From Peripheral Risk to Boardroom Priority: Geopolitics on the CEO Agenda

“You may not be interested in geopolitics, but geopolitics is interested in you,” goes the adage. In 2025, this rings truer than ever in corporate suites. Not long ago, many CEOs saw geopolitical events—wars, sanctions, diplomatic spats—as external risks to monitor, perhaps handled by a government affairs office or an occasional consultancy brief. Today, those risks have forced their way into the heart of enterprise strategy. A recent global survey by The Conference Board found that CEOs ranked geopolitical instability as their top external concern for the year ahead. This marks a dramatic shift in mindset. In past decades, issues like macroeconomic cycles, competition, or technology disruption usually dominated CEO worry lists. Now, the realization has set in that political factors can have an even more immediate and profound impact on business fortunes.

The numbers tell a compelling story of this awakening. According to McKinsey’s late-2025 CEO survey, geopolitical instability outranked inflation, cybersecurity, and even technological disruption as the chief risk to business growth. In Oliver Wyman’s 2025 CEO Agenda study, 84% of CEOs reported they are taking active measures to address geopolitical risks, up from 78% the year prior. Moreover, a striking 89% of chief executives surveyed said that geopolitics, trade policy shifts, and industrial policy interventions pose a tangible risk to their company’s future—a jump of 20 percentage points in just one year. What was once considered a niche concern of multinationals in certain sectors has quickly become a universal preoccupation. This surge in attention is unsurprising after the shocks of recent years. Business leaders have watched global supply chains seize up due to sudden export bans, seen entire markets vanish behind sanctions overnight, and felt the pinch of rising tariffs on their cost structures. Geopolitical risk is no longer abstract—it hits the balance sheet.

Importantly, boards of directors are rolling up their sleeves too. There is a growing recognition at the board level that governance must encompass geopolitical risk oversight, not just traditional financial and compliance risk. In many companies, directors are asking more pointed questions: What is our exposure in China versus our exposure in the West? How would our business handle a rupture in relations between X and Y country? Do we have plans if a key country imposes capital controls or if a vital shipping lane is closed by conflict? The need for expertise is evident. Over the past two years, companies have started adding board members with backgrounds in foreign policy, national security, or global economics. As one governance expert noted, there has been “growing demand at the board level for geopolitical expertise,” yet little consensus on how best to incorporate it. Some boards have created new committees or expanded the mandate of risk committees to specifically monitor geopolitical developments. A Willis Towers Watson report on boardrooms in Singapore—an economy highly exposed to U.S.–China rivalry—urged moving “beyond surface-level conversations” and formally integrating geopolitical risk into board committee charters and risk frameworks. The recommendation: set up dedicated board task forces or ensure regular briefings so that geopolitical threats and opportunities are systematically considered, rather than discussed ad hoc only after a crisis hits.

This structural response is still evolving. Unlike financial risk or cyber risk, where frameworks are well-defined, geopolitical risk doesn’t lend itself to easy quantification or audit checklists. As Dottie Schindlinger of the Diligent Institute observed, “Geopolitics is rising up the ranks… directors are concerned about it,” but many admit they “aren’t quite sure exactly what to do about it”. There is no ISO standard for geopolitical agility. Nonetheless, forward-looking boards are experimenting with new approaches: engaging external advisors (such as former diplomats or geopolitical analysts) to brief the board periodically, running tabletop exercises on geopolitical crisis scenarios, and monitoring key risk indicators (e.g. sanctions lists, trade policy changes, conflict escalation meters) as part of enterprise risk management dashboards. In the UK, a coalition of risk management professionals even published guidelines for “principles-based geopolitical risk oversight” to help fill this governance gap. The message is clear: treating geopolitical risk purely as a subset of regulatory compliance or PR is no longer sufficient—active board oversight is becoming a fiduciary expectation in its own right.

The urgency behind all this is the sheer scale of recent business disruptions tied to geopolitics. Consider a few high-profile examples that have concentrated executive minds. When Russia launched its full-scale invasion of Ukraine, dozens of blue-chip multinationals from energy, manufacturing, retail and tech had to suspend or exit their Russian operations due to sanctions and reputational pressure. Companies like Shell, ExxonMobil, McDonald’s, and IKEA made swift departures from a market that had been profitable for decades. The financial hits were enormous (as noted earlier, over $170 billion collectively), but the reputational and regulatory stakes left little choice. These decisions often fell squarely on CEOs and boards: in essence, geopolitical events forced strategic choices—withdraw vs. remain—that carry ethical, financial, and stakeholder implications. Many Western CEOs suddenly found themselves in the unfamiliar position of aligning corporate actions with foreign policy goals (e.g. supporting sanctions) and grappling with questions of corporate responsibility in conflict situations.

Similarly, in the U.S.–China context, executives have had to navigate a minefield of tensions: export controls on semiconductors, bans on doing business with certain Chinese tech firms, tariffs on vast categories of goods, and the ever-looming possibility of further decoupling. Supply chain decoupling has gone from a theoretical scenario to an active project for many companies. A recent study indicated just over half of large-company CEOs have taken measures to de-risk supply chains, such as qualifying new suppliers in “friendly” countries or redesigning networks for flexibility. For example, manufacturers that relied heavily on China have been evaluating production in Vietnam, India, Mexico, or Eastern Europe to hedge against future trade barriers. The COVID-19 pandemic initially kicked off this diversification push, but geopolitics has become an equally strong driver. Yet, interestingly, most CEOs are not executing a full retreat from globalization: in Oliver Wyman’s survey, 52% plan to diversify supply chains geographically, while only 13% intend to reshore major operations domestically. This suggests a strategy of “strategic diversification”—maintaining a global footprint but spreading bets and avoiding overconcentration in any single country or region that could become a point of failure. Globalization isn’t dead; it’s just being reconfigured to be more resilient to political shocks.

Another domain where geopolitics has become front-and-center is technology and data governance. CEOs of tech companies, in particular, have recognized that they effectively operate in a geo-strategic arena. The debates over 5G infrastructure (e.g. Huawei’s role), over social media content and national security, and over data localization laws all mean tech firms must treat government relations and political trends as core to their business strategy. Witness how quickly a platform like TikTok became the subject of intense geopolitical scrutiny. Or consider the semiconductor industry: leading chipmakers now coordinate closely with their home governments on supply chain security and are rethinking investment plans based on new chip export restrictions. As one BCG analysis noted, “geopolitics is now a critical strategic issue” for any company deeply involved in technology or global networks. Boards in these sectors have started to include geopolitical risk updates as regular agenda items, much as they already do for cyber threats or regulatory compliance.

We also see the rise of what might be termed the “diplomat-CEO.” More chief executives are stepping out to engage with policymakers, international forums, and even public opinion on geopolitical issues. This can range from quiet lobbying (for example, tech CEOs urging the U.S. government to clarify rules on AI exports to China) to very public stances (such as CEOs pledging support for Ukraine or advocating for climate policies in the face of political headwinds). A McKinsey study highlighted that CEOs actually have a trust advantage in society: 67% of people trust “my CEO,” versus only 47% who trust government leaders. Recognizing this credibility, some CEOs are taking more active roles in shaping debates on trade, sustainability, and global standards—areas that traditionally were left to states. The logic is that if geopolitical forces are going to shape your business, you had better have a voice in shaping the operating environment. Of course, this must be done carefully; wading into political issues carries its own risks of backlash. But the days of CEOs sitting aloof from politics are fading. As McKinsey put it, CEOs can either help shape the geopolitics around them or be shaped by them. Increasingly, business leaders feel they have no choice but to engage.

In summary, geopolitics has vaulted to the top of the CEO and board agenda, driven by clear-eyed recognition of the stakes. The corporate world’s immune response is taking several forms: heightened risk awareness, organizational changes to bring geopolitical analysis into strategy-making, active scenario planning (as we’ll explore next), and even cultural shifts in leadership thinking. Companies that once prided themselves on being “neutral” or apolitical now acknowledge that staying neutral is impossible when the environment itself is polarized. The next section delves into how strategic planning and risk management are being reinvented for this new reality. How do CEOs make decisions amid such uncertainty? One answer lies in mastering sensemaking and scenario thinking—developing a forward-looking radar for geopolitical shifts and baking flexibility into strategy. By anticipating multiple futures and stress-testing their plans, leaders can avoid being caught flat-footed by the next shock. We will examine the emerging toolkit of the Geopolitical CEO: from building internal “geopolitical intelligence” teams to running war-game simulations to crafting strategies that are robust against radically different world scenarios.

III. Strategy in an Age of Uncertainty: Sensemaking, Foresight, and Scenario Planning

In a world as volatile and ambiguous as today’s, strategic planning has become an exercise in uncertainty navigation. The old approach of predicting the future based on linear trends and then making a single “best estimate” plan is largely defunct. As management icon Peter Drucker once quipped, “Predicting the future can only get you into trouble... The task is to manage what is there and to work to create what could and should be.” Leading companies are taking that advice to heart by embracing scenario planning, real-time intelligence, and flexible strategy design. The goal is not to predict the exact course of geopolitics, but to prepare for a range of plausible futures and develop the organizational agility to pivot as needed. This chapter explores how CEOs and their teams are strengthening their sensemaking capabilities—developing what one might call a corporate “geopolitical radar”—and integrating geopolitical foresight into core strategy processes.

From Forecasting to Foresight. Traditional forecasting models have struggled badly in recent years. Few economists or strategists foresaw events like the sudden pandemic of 2020 or the major war in Europe in 2022. These shocks revealed the fragility of relying on straight-line projections of the past. As a World Economic Forum analysis observed, conventional risk models often create an illusion of certainty, blinding decision-makers to low-probability but high-impact events. In contrast, scenario planning acknowledges that the future may diverge sharply from the past, encouraging leaders to imagine multiple, divergent outcomes. This method, pioneered by firms like Shell in the 1970s, has seen a renaissance in the 2020s. It forces management teams to ask “What if…?” systematically: What if a superpower conflict breaks out? What if my host country expropriates foreign businesses? What if two trading blocs decouple entirely, or conversely, what if an unexpected peace deal opens a once-closed market? By grappling with these hypotheticals ahead of time, organizations build mental models and contingency plans that can be activated if reality starts rhyming with one of the scenarios.

Many companies are formalizing this practice. Dedicated scenario teams or “war rooms” have been established in some leading multinationals. For example, the global energy company Shell maintains a renowned scenarios group that uses economic and geopolitical modeling (including energy market and trade-flow data) to map out future worlds and stress-test the company’s strategy against them. Those scenario insights directly inform major investments and portfolio choices at Shell. This kind of integration—where scenario planning isn’t just an academic exercise but a driver of actual strategic decisions—is becoming a hallmark of organizations with high geopolitical maturity. McKinsey finds that “CEOs in the highest-performing organizations” often establish cross-functional foresight teams alongside a central nerve center to continuously scan the horizon. The nerve center gathers intelligence (monitoring news, policy changes, risk indicators), and the foresight team translates that into scenario analysis and decision options for leadership. Together, they act as the CEO’s extended eyes and ears on the geopolitical landscape, helping orchestrate a company-wide perspective, or “house view,” on what the future might hold.

A key element of this foresight work is defining a small set of distinct scenarios that encapsulate the most critical uncertainties. One popular approach many CEOs are using is to plan for “two worlds”: one scenario where globalization hangs together (albeit rebalanced and more regionalized), and another where a full-fragmentation occurs, splitting the global economy into rival blocs. McKinsey has dubbed these contrasting futures “a diversified world” versus “a fragmented world”. In the first, trade and investment continue across many borders (with some adjustments), while in the second, regional self-sufficiency and alliance-based trade dominate, greatly limiting global integration. By preparing strategies for both eventualities, companies aim to be ready no matter which way the geopolitical winds blow. For instance, a CEO might ask: In scenario A (open-ish world), we invest in these markets and leverage global supply efficiency; in scenario B (fractured world), we double down in certain key countries, exit others, and localize production. Even if reality lands somewhere between the extremes, this exercise highlights no-regret moves (like diversifying supplier bases) that make sense in any case, and it flags decisions that should be staged or timed to maintain optionality.

Another lens for scenarios is thematic rather than binary. Some organizations create thematic scenarios such as: “Tech Cold War” (where technology ecosystems bifurcate entirely), “Green Renaissance” (where climate cooperation ameliorates tensions), “New Cold War” (prolonged standoff among great powers), “Multi-Polar Peace” (no single hegemon, but managed competition). The aim is not to cover every permutation, but to capture the most consequential axes of change. By doing so, companies can pressure-test their strategies. For example, if a consumer goods company finds that in a “Tech Cold War” scenario its entire digital infrastructure strategy fails (because it relied on globally unified platforms that might split), that’s a red flag to address now. This use of scenario planning moves it from abstract speculation to a rigorous risk management and innovation tool. Indeed, some CEOs treat geopolitical scenarios on par with financial forecasts in their strategy reviews. In practical terms, this might mean the CEO’s presentation to the board includes not only the base-case revenue outlook but also, say, an analysis of how a 10% tariff increase or a sanction on a major market would impact the P&L and what the mitigation plan would be. Such integration ensures that geopolitical thinking is not siloed in an appendix but is central to planning.

To support this, companies are harnessing data and technology. Advanced analytics and AI tools can help filter signal from noise in the firehose of global information. For instance, machine learning algorithms can scan millions of news articles, social media posts, and government filings to detect emerging “weak signals” of change—patterns that might presage a new policy or conflict. AI-based models can also perform outlier detection, flagging when an indicator (say, credit default swaps for a country, or shipping insurance rates in a region) deviates from norm in a way that could indicate rising risk. One WEF paper advocates blending such quantitative tools with scenario planning to build an integrated geopolitical risk assessment framework. For example, an AI might highlight that a certain country is suddenly stockpiling commodities at abnormal rates (a possible clue to future sanctions or conflict), which would feed into scenario discussions about supply security. Another concrete practice is building “geopolitical dashboards” that track key metrics: trade volumes on critical routes, sanction lists changes, election outcomes, military developments, etc. When these metrics move, the scenario team and executives can quickly reassess assumptions.

Yet, even with all the data in the world, strategic decisions under uncertainty require judgment and sensemaking. Sensemaking is a softer skill: it’s the ability to contextualize events, interpret complex signals, and deduce what they mean for the organization’s purpose and strategy. In a geopolitically tumultuous time, leaders must become chief sensemakers for their teams. That means continuously translating world events into business relevance. For example, if there’s a sudden coup in an emerging market, employees across the company will wonder: Are we affected? Are our people safe? Does this change our strategy there? The CEO and leadership team need to rapidly assess the situation, possibly consult their geopolitical advisors, and then communicate a narrative: what’s our stance, what actions (if any) we’re taking, and how it fits into our broader strategic posture. Doing this well maintains alignment and reduces internal confusion or panic. It also guards against knee-jerk reactions. A CEO with strong sensemaking skills can prevent an organization from lurching erratically in response to every headline, and instead foster a calm, proactive approach to emerging risks.

One powerful example of proactive foresight in action is Apple’s adjustment of its manufacturing strategy. Years before U.S.–China trade relations hit their most fraught point, Apple’s CEO Tim Cook anticipated rising frictions and quietly began diversifying production away from China. He and his operations team cultivated manufacturing in India, among other places, not as a complete replacement but as a significant hedge. By 2024, about 14% of iPhones were being assembled in India (roughly $14 billion worth of output). This move turned out to be prescient: it mitigated Apple’s exposure to potential U.S. tariffs on China-made devices, and it allowed Apple to benefit from India’s government incentives for local manufacturing. In effect, Apple’s leadership turned a geopolitical shift into an operational advantage, securing an alternate production base under favorable terms. Notably, this wasn’t a reaction after the fact—it was a strategic initiative launched before the full brunt of trade tensions materialized, informed by a foresight that the global order was tilting. The Apple case underscores how crucial it is for CEOs to be scanning the horizon and making preemptive strategic moves. Those who wait for clarity may find it’s already too late; those who act on informed scenarios can steal a march on competitors.

Another illustration comes from the early phase of the U.S.–China trade war. Some manufacturing firms that had pre-qualified alternative suppliers in different countries were able to shift production within weeks when tariffs struck in 2018, thereby avoiding major financial losses. In contrast, competitors who had all their eggs in one basket scrambled and suffered. The difference was not foresight about the political event itself (few knew tariffs were coming) but foresight in operational planning—maintaining a diversified supplier network “just in case.” In scenario planning terms, this is a “no regrets” move that pays off whenever disruption happens, regardless of its exact form.

To embed such capabilities, some companies are also running regular simulation exercises. These are essentially fire drills for geopolitical crises. For example, a multinational might conduct a simulation in which a sudden change (say, a major new sanction or a conflict in the South China Sea) is announced, and teams have 48 hours to respond with a plan to adjust operations and communications. Several global manufacturers now include scenarios like sudden tariff changes or export bans in their management training programs, forcing country managers to practice reacting in real time. These drills train leaders to anticipate regulatory shifts and coordinate rapid responses, ingraining a muscle memory in the organization for agile action. The formal inclusion of geopolitics in leadership development sends a cultural signal too: it says that staying informed on world affairs and thinking through second- and third-order effects is part of everyone’s job, not just the risk officer’s. This is how a culture of geopolitical awareness is built over time.

The emphasis on multiple scenarios and agility does not mean companies are rudderless or reactive. Paradoxically, by preparing for many possibilities, a company can be more resolute in pursuing its long-term vision. It can commit to big strategic bets with confidence, knowing it has fallback plans and a keen eye on triggers that might require course correction. For example, a CEO might decide: “We will invest heavily in Market X because in most plausible scenarios it’s a winner for us; however, if Scenario Y (an extreme negative scenario for Market X) starts becoming likely, we have an exit strategy or a pivot ready.” This kind of thinking allows firms to still pursue bold growth opportunities amid uncertainty, rather than hide in a bunker. Research shows that companies which maintained strategic investment through the 2020s volatility (rather than retreating) outperformed peers over the cycle. The trick is doing so in a risk-informed way—what McKinsey calls adopting a “through-cycle mindset,” continuing to invest in long-term moves even during turbulence.

In summary, the art of strategy in a geopolitically fragmented era is the art of balancing foresight and flexibility. Leading CEOs are becoming chief futurists for their organizations: cultivating proprietary insights into how the geopolitical chessboard might evolve, and steering their companies with adaptive strategies that can weather storms or seize unexpected openings. In practice, this involves scenario planning embedded into strategy formulation, continuous intelligence-gathering with new technologies, and a cultural shift toward agility and preparedness. Crucially, it also means reframing geopolitics not just as a risk to be mitigated but as a realm of potential opportunity (a theme we touched on earlier). If a company can spot how a trade realignment or a new alliance creates a gap in the market, it can move to capitalize on it faster than competitors. The next chapter will delve into how organizations are restructuring and building resilience to execute on these strategies—examining the operational and organizational transformations that enable a company to be geopolitically astute. From re-engineering supply chains to creating new C-suite roles focused on external risks, we look at how corporate structures and processes are evolving to support the Geopolitical CEO’s mandate.

IV. Rethinking Corporate Structure for Resilience: From Supply Chains to the C-Suite

Formulating a geopolitically savvy strategy is one side of the coin; the other side is having an organization capable of executing it. Many CEOs are recognizing that yesterday’s corporate structures—designed for efficiency and optimization in a relatively stable environment—may not be fit for purpose in today’s turbulence. Resilience, adaptability, and rapid response need to be built into the very architecture of global companies. This entails changes ranging from how supply chains are organized, to how decisions are made, to who sits in the C-suite. In this chapter, we explore the operational and organizational innovations that companies are adopting to thrive in a world of fragmenting markets and fast-moving political shifts. The common thread is a shift from assuming stability to expecting disruption, and structuring the company accordingly.

Resilient Supply Chains and Operations. Perhaps the most immediate reengineering has come in the realm of supply chains. The just-in-time, single-source, globe-spanning supply chain model that maximized cost savings is being tempered by a new priority: redundancy and robustness. CEOs are increasingly framing supply chain resilience as a board-level priority—not just a concern for operations managers—because a supply shock can cripple the entire enterprise. In practice, this means companies are willing to carry extra inventory, qualify multiple suppliers for each key input, and even duplicate production lines in different regions, despite the added cost. For example, learning from the 2011 Fukushima disaster and subsequent semiconductor shortages, Toyota had required its suppliers to hold two to six months of chip inventory as a buffer. A decade later, when the global chip shortage hit in 2021, Toyota famously outperformed many competitors, its production barely skipping a beat while others were idling factories. That foresight—mandating buffers and multi-sourcing—proved its worth, and it’s a lesson not lost on other industries. As noted earlier, firms that had “plan B” suppliers in multiple regions were able to nimbly navigate tariff hikes in 2018. Now, more companies are institutionalizing such practices, effectively buying insurance through operational design. The cost of carrying an extra few weeks of inventory or maintaining parallel supplier relationships is being seen as a justifiable investment in resilience, akin to an insurance premium that protects revenue when (not if) the next disruption comes.

Beyond sourcing, production footprints are being reconsidered. The mantra of the 1990s and 2000s was to concentrate manufacturing in the most cost-efficient locations (often China or other low-cost hubs) and ship globally. Today’s mantra is diversification and regionalization: maintain production in multiple hubs (e.g. one in Asia, one in North America, one in Europe) to hedge against region-specific shocks like sanctions or trade embargoes. This doesn’t necessarily mean full localization in every market, but rather a multi-hub strategy. For instance, semiconductor companies are investing in new fabs in the U.S. and Europe, spurred by both government incentives and the realization that relying solely on Asia entails geopolitical risk (given tensions over Taiwan, etc.). Similarly, pharmaceutical and medical device firms, spurred by the pandemic’s wake-up call, are setting up secondary manufacturing sites closer to end markets to avoid being caught out by export restrictions on critical supplies. The EY 2025 CEO survey highlighted that many leaders are “rewiring” operations to be closer to customers and communities—which also means aligning with local regulations and political expectations more easily. The trade-off is higher operating cost in some cases, but the payoff is greater agility and political acceptability (governments are certainly happier when production and jobs are local or at least in friendly nations).

In line with this, the concept of “friendshoring” emerged—a strategy of concentrating trade and investment among geopolitically allied countries to reduce the risk of dealings with a hostile power. Interestingly, recent data suggests that rigid friendshoring (only trading within your bloc) might be giving way to a more nuanced diversification. UNCTAD reported that in 2024 businesses actually reversed some nearshoring/friendshoring moves, opting instead to spread their supplier network across multiple regions rather than overly concentrate on a narrow set of “safe” countries. The logic is to avoid any single point of failure—be it a hostile country or even an ally that might face its own crisis. In effect, companies are saying: don’t put all eggs in one basket, even if that basket is your best friend. Diversification itself becomes the strategy. This approach adds complexity, of course. Managing a more dispersed supply chain with varying standards and cultures is challenging, but companies are leveraging digital tools to get better visibility across their networks, and they are investing in stronger supplier relationships and risk monitoring. The mantra could be summed up as “flexibility over efficiency”: it may be a bit less efficient day-to-day, but when the unexpected hits, flexible networks bend rather than break.

Rapid Decision Mechanisms. Structural resilience is not only about physical assets and suppliers—it’s also about how quickly and effectively a company can respond internally to a sudden geopolitical event. Traditional corporate hierarchies, with multi-layered decision approvals, can be too sluggish in a fast-moving crisis. To address this, some companies are creating cross-functional rapid response teams or councils that can convene at a moment’s notice. A compelling example comes from a large consumer goods company that established a “geopolitics response council” empowered to gather within 48 hours whenever a major policy change or geopolitical shock occurs. This council includes leaders from legal, supply chain, finance, communications, and business units, ensuring all angles are covered. When, say, a new sanction or tariff is announced, this team jumps into action: they assess the impact on operations and compliance, decide on communications to customers and stakeholders, and coordinate any needed shifts (like re-routing shipments or adjusting pricing). By having a standing forum and escalation channel, the company doesn’t waste precious time figuring out who needs to meet and how to respond—the playbook is already there. Essentially, it’s a form of institutionalized agility. The broader principle is to push decision-making closer to real-time, and to empower a group of senior managers to take coordinated action without having to wait for the next scheduled executive committee meeting or board meeting.

Furthermore, companies are examining their governance processes to ensure they can handle ambiguity. In a stable environment, companies might centralize decision-making at HQ for consistency. In a volatile environment, there’s a case for more decentralized authority so local teams can act fast in response to local events (within guardrails). For instance, if a sudden regulatory change hits a particular country, the country manager might be given leeway to make operational calls immediately rather than seeking global HQ approval. However, decentralization carries the risk of divergent responses that could conflict with a “one company” stance. It’s a delicate balance: being agile locally but not incoherent globally. One solution is to establish clear triggers for when local autonomy kicks in versus when issues must be escalated to corporate level (the geopolitical response council concept helps define those triggers). Another is to pre-define the values and principles that guide any response—so that even if local teams act independently, they do so in line with a common corporate ethos.

One Company Culture in a Divided World. Speaking of ethos, an intriguing adaptation is occurring in corporate culture to reinforce unity across borders. Geopolitical tensions can risk splintering multinationals internally—employees in different countries might start seeing each other as belonging to “us vs them” camps if nationalism rises. To counter this, some companies have explicitly adopted “One Company” principles in internal communications, emphasizing that whatever frictions exist between nations, inside the enterprise everyone shares the same mission. For example, a firm might state that conflicts between governments should stop at the company’s borders; they do not dictate how colleagues in different offices treat each other. Some organizations have gone so far as to embed this in their code of conduct, pledging that all employees, whether in the U.S., China, Russia, or elsewhere, are part of one team and will collaborate irrespective of political disputes. This is easier said than done, of course, especially if employees themselves feel strong loyalties to their home country’s position. But leadership can set a tone of mutual respect and focus on common goals, actively discouraging divisive rhetoric internally. By reinforcing a shared corporate identity, companies aim to maintain operational coherence and knowledge-sharing across subsidiaries, even as the outside world pulls apart. In essence, it’s a mini version of what the global system writ large is struggling with—keeping cooperation alive amid conflict—played out within the confines of a corporation.

The Rise of the Chief Geopolitical Officer. Perhaps the most headline-grabbing structural innovation has been the call for a Chief Geopolitical Officer (CGO) role in the C-suite. While only a few firms have formally created a CGO title so far, the idea has gained significant traction in thought leadership circles. The World Economic Forum argued in 2025 that appointing a CGO is an “urgent priority for business,” in light of an increasingly fractured global landscape. The CGO’s mandate is to integrate geopolitical intelligence and risk analysis directly into corporate strategy at the highest level. This is not just a glorified government relations head; it’s conceived as a strategic role akin to how Chief Financial Officers and Chief Technology Officers operate—providing insight and foresight to shape decisions across all business units.

In many companies, the functions that cover pieces of geopolitical risk are scattered: government affairs handles lobbying and regulatory compliance; risk management might handle insurance and operational risks; strategy teams might occasionally look at macro trends. The CGO concept seeks to unite these strands under a single leader who reports to the CEO and can speak the language of business as well as geopolitics. The CGO would maintain a holistic view of how global developments—from election outcomes to new laws to social unrest—could affect the firm’s outlook, and ensure proactive strategies are in place. Essentially, it’s about having geopolitical “muscle” at the leadership table full-time.

Already, companies are moving in this direction even without the exact title. Many leading firms have set up geopolitical intelligence units (often within strategy or risk departments) and are hiring executives with deep diplomatic, security, or policy backgrounds. Russell Reynolds, the executive search firm, reported a spike in demand for senior leaders with geopolitical expertise post-2024, including bringing in former ambassadors or national security officials to corporate roles. Some Fortune 500 companies have been explicitly recruiting for diplomatic skills—a notable example is tech companies hiring former government figures to manage global affairs (e.g. Meta (Facebook) hiring a former UK Deputy Prime Minister as its head of Global Affairs). This trend mirrors the earlier rise of specialized C-roles: the Chief Information Security Officer (CISO) emerged when cyber risk became a boardroom issue, the Chief Sustainability Officer (CSO) when environmental and social issues became material. In the same way, the CGO or equivalent role signals that geopolitical risk and opportunity have elevated to an “existential business imperative” requiring dedicated leadership.

What would a CGO (or head of geopolitics) actually do day-to-day? Based on thought leadership descriptions, several core duties stand out:

• Intelligence & Monitoring: Continuously monitor global political developments, from elections to policy changes to conflict zones, and distill what they mean for the company. Use networks of information (governments, think tanks, local offices) to stay ahead of emerging issues. This “radar” function means the CGO is effectively the early warning system for the enterprise.

• Scenario Planning & Strategy Input: Lead the development of geopolitical scenarios and ensure the top team considers them in strategic planning (as discussed in the prior chapter). Essentially orchestrate the “house view” on geopolitics. A CGO would help pressure-test major investments or expansions against political risks: e.g., should we build a factory in Country X given rising nationalist rhetoric there? How do we hedge that risk?

• Risk Mitigation & Crisis Response: Coordinate with the risk management function to incorporate geopolitical risk into enterprise risk management. Ensure the company has contingency plans for plausible crises (supply disruptions, sanctions, evacuations in conflict, etc.). In a live crisis, the CGO could chair the response council we mentioned earlier, bringing together experts to take decisive action.

• Opportunity Seizing: Not just avoiding harm, but finding upside. A sophisticated CGO will ask: Are there markets opening or shifting due to geopolitical change? Are there government incentives (like new subsidies or trade agreements) we can capitalize on? For example, if country A and B sign a new trade deal, can we benefit by reallocating production to exploit lower tariffs? Or if a rival is constrained by sanctions and we are not, can we capture their market share? The CGO can help identify such strategic moves.

• Stakeholder Engagement & External Shaping: Represent the company in dialogues with governments, international organizations, or industry groups on geopolitical matters. Because CEOs cannot do it all themselves, the CGO might handle a lot of the behind-the-scenes engagement—ensuring the company’s perspective is heard by policymakers and that the company is aware of upcoming regulatory or policy shifts. In some cases, CGOs might coordinate collective action with other firms (through trade associations) when industry-wide geopolitical issues arise.

• Internal Advisor and Educator: Serve as the go-to advisor for business unit leaders when they have questions like “We’re thinking of entering Market Y, what are the political risks?” or “How do we navigate this new law in Country Z?” Over time, a CGO also helps elevate the geopolitical acumen of the whole leadership team, injecting insights into discussions so that others start thinking in those terms too.

It’s worth noting that whether or not a formal CGO exists, some CEOs have effectively taken on the mantle themselves. Indeed, one could argue the CEO must act as the de facto Chief Geopolitical Officer, in the sense of personally engaging with these issues and driving the agenda. KPMG’s CEO Outlook in 2025 found that many CEOs feel their role has expanded: they now must focus on agility, risk prioritization, and broader stakeholder communication in ways that were not as critical before. Top executives increasingly spend time on things like meeting policymakers, discussing geopolitical risks with their boards, and leading internal communication on world events. They recognize that these activities are integral to safeguarding and advancing the business. As one McKinsey piece pointed out, modern CEOs have “direct access to nerve centers” and unique vantage points, so they are uniquely positioned to formulate and communicate the company’s stance on geopolitical matters. Hence, even with a CGO or similar, the CEO cannot delegate away geopolitical leadership; they must actively champion it, while relying on new structures and experts to support them.

Leveraging Regulatory Complexity as Competitive Advantage. Another structural shift is in the approach to regulatory compliance. Instead of seeing the growing thicket of divergent regulations as purely a burden, savvy companies are trying to get ahead of it and turn it into a differentiator. This means investing in robust compliance systems and talent, not only to avoid missteps, but to respond faster and more creatively than competitors. For instance, some multinationals have built “regulatory playbooks” that map out how various tariff or sanction scenarios would affect them and what countermeasures they have (such as alternative sourcing or legal workarounds). By simulating these scenarios and even pre-negotiating exemptions or tariff classifications in advance, they can move with speed when a rule changes. A company that has already modeled the cost impact of a potential export control and engaged authorities about exemptions is a step ahead of a competitor that is scrambling post-announcement. CEOs are instructing their teams to treat compliance and regulatory adaptation not as “the cost of doing business” but as a source of competitive advantage. This reframing can be powerful. If your organization can consistently navigate complex rules faster and more reliably than others—say, you’re always first to get products back on shelves after a sanction because you had the contingency route in place—you gain market share while others are stuck in red tape.

To enable this, companies are deploying advanced compliance tech. Tools that automatically track regulatory changes worldwide, AI that flags relevant law changes, databases that map every product to applicable trade codes and tariffs—these are becoming critical infrastructure. The CEO’s role is to champion investment in these areas (which historically might have been under-funded back-office domains) and to foster collaboration among legal, IT, and operations to implement them. For example, a cutting-edge export control monitoring system might integrate with the supply chain management software, so that if a certain component gets restricted, the system immediately alerts procurement to source a different component. This kind of digitally enabled agility turns what could be an existential threat (e.g., suddenly you can’t import a key input) into a manageable switch that happens with minimal business disruption.

Organizationally, CEOs are also bringing together cross-functional teams for regulatory strategy. Instead of each country manager lobbying separately or each function doing its own thing, companies are centralizing intelligence on regulatory trends and coordinating responses. This might involve a regulatory center of excellence or task force that looks at upcoming laws (on trade, data, climate, etc.) across markets and crafts a unified corporate stance—both in terms of compliance and advocacy. By doing so, they avoid the left hand not knowing what the right is doing, and they can present coherent positions to governments (which in turn can yield better outcomes, like securing clearer rules or grace periods).

In sum, building a resilient and adaptive corporate structure means breaking down silos and creating new connective tissue within the enterprise. Rapid action teams, integrated risk assessments, new leadership roles, and a culture of unity and agility all serve to make the company less brittle in the face of shocks. We are essentially witnessing the emergence of the corporation as its own mini-state in how it navigates geopolitics—employing its own intelligence apparatus, crisis units, foreign relations, and defense mechanisms (figuratively speaking). Of course, companies cannot (and should not) operate wholly apart from the states they reside in; they must align with national laws and interests to an extent. But by strengthening internal capabilities, they can better handle the push and pull of those external forces.

Finally, it’s worth noting that resilience and agility are also talent issues. Companies need people who are comfortable with uncertainty, quick learners with diverse perspectives, and leaders who can make decisions with incomplete information. Thus, HR and leadership development play a supporting role in this structural shift. As we saw, some firms incorporate geopolitical simulations into training. Others are rotating high-potential managers through international assignments or stints in government liaison roles to broaden their worldviews. The idea is to cultivate a generation of leaders who instinctively think about geopolitical context, much as an earlier generation learned to think about digital or globalization as givens.

With robust structures and processes in place, organizations are far better positioned to execute strategies successfully and to avoid being thrown into chaos by the next crisis. However, one cannot engineer resilience through structure and process alone. Leadership and culture remain the linchpin. In the final chapter, we turn to the human element: what mindsets, behaviors, and cultural norms CEOs must foster in themselves and their organizations to truly thrive amid geopolitical turmoil. The best-laid strategies and structures can falter if people lack the right leadership ethos—one of adaptability, openness, vigilance, and principled decision-making under pressure. How should CEOs lead differently in this new era, and what does it mean for the culture of the companies they helm? We conclude with reflections on the leadership imperatives in a fragmented global order.

V. Leadership and Culture in a Geopolitical Age: The New Imperatives for CEOs and Boards

Amid all the analysis of external forces and internal systems, it’s easy to overlook a fundamental truth: organizations are made of people, and it is ultimately the mindset and values of leaders that determine how successfully a company navigates a storm. Geopolitical turbulence tests leadership in profound ways. It demands CEOs and boards who can balance ambiguity with clear direction, who can stand by core values under pressure, and who can inspire trust and resilience throughout the organization. In this final chapter, we discuss how the role of the CEO is being redefined by geopolitics and what kind of leadership culture companies must cultivate to flourish in a fragmented world.

The CEO as Sensemaker-in-Chief. We’ve touched on the CEO’s role in sensemaking and scenario-setting; it’s worth emphasizing just how pivotal this is. In calmer times, a CEO could focus mainly on executing a well-defined strategy and hitting financial targets. Now, a CEO’s job often starts with making sense of swirling external events and formulating a narrative for the company’s stakeholders about what it all means. Employees look to leadership for context: Are we safe? Will the war in region X affect our jobs? Why are we pulling out of market Y? Likewise, investors want to know that leadership has a handle on risks and a plan to manage them. The communications aspect of CEOship has thus grown—both internally and externally. It requires transparency and honesty about uncertainties (admitting what you don’t know yet), combined with confidence in the team’s preparedness and values. The Edelman Trust Barometer consistently finds that employees and the public expect CEOs to speak out on major societal and geopolitical issues, not stay silent. That’s a sea change from a generation ago, when many leaders avoided such topics. Today’s employees, especially younger ones, often demand that their employer have a stance on issues like war, human rights, or national policy if those issues intersect with the business. CEOs must step into this public leadership role carefully—grounding their positions in the company’s values and long-term interests, and being ready to explain decisions that might be contentious.

Consider how numerous CEOs publicly condemned the invasion of Ukraine and took actions to support humanitarian efforts, even beyond complying with sanctions. These moves were partly moral, partly reputational, but also about internal culture—signaling to employees that the company lives its values. In other cases, CEOs have had to explain why they remain in a market (for instance, some consumer goods companies stayed in Russia for a time to provide essential products like food and diapers, framing it as a humanitarian need). These decisions carry no easy answers, but they underscore that leadership now includes geopolitical ethical choices, and communicating the reasoning is key to maintaining trust.

Principled Leadership Under Pressure. A fragmented world often forces companies into complex ethical territory. Which side of a sanctions regime will you stand on? Do you restrict access to your products in certain countries based on how they might be used? What if your home government’s stance conflicts with your employees’ sentiments in another country? Navigating these dilemmas requires a strong anchoring in corporate values and principles. The CEO and board need to articulate what the company stands for and where lines are drawn. For instance, many global companies codified commitments to human rights and rule of law in response to the challenges of operating in jurisdictions with repressive regimes or widespread corruption. When a geopolitical crisis hits, those prior commitments can guide action. A leadership culture that prioritizes integrity and consistency will more likely make decisions the organization can be proud of in hindsight, rather than purely expedient choices that might haunt its reputation.

One example is how some companies have handled the issue of user data in authoritarian countries. Leadership had to weigh obeying local data localization laws (and potentially enabling surveillance) versus the company’s stated value of privacy. Some chose to pull services or shut down operations in those countries rather than violate their principles; others tried to find middle ground. Regardless of the decision, the point is that leaders must be prepared to take principled stands, even at cost, when fundamental values are at stake. That kind of courage is part of the new leadership contract. Boards play a role here too: they must back up CEOs when hard calls aligned with values are made, rather than second-guessing purely on short-term financial grounds.

Adaptive and Decisive Culture. In a study of organizational health, companies with leaders who act decisively and commit to decisions were found to be over four times more likely to be considered “healthy” organizations. This underscores that in times of uncertainty, dithering is deadly. A culture that encourages timely decision-making—even if that means sometimes making 70% informed decisions and adjusting later—outperforms one where paralysis by analysis reigns. CEOs need to model this decisiveness. That means setting up processes (like the rapid response teams we discussed) that allow for quick calls, but it also means showing personal willingness to make tough decisions without perfect information. Employees take cues from the top: if they see a CEO calmly but promptly decide to, say, halt operations in a conflict zone to protect staff, they understand that action and safety are valued over wait-and-see penny-pinching. If they see leadership endlessly waffle on whether to exit a problematic market, morale and trust erode.

However, decisive does not mean impulsive. The best leaders combine decisiveness with adaptive learning. That is, make the call, but continuously learn from outcomes and be ready to pivot. This is essentially the agile mentality applied to leadership: iterate, get feedback from reality, and iterate again. It might feel uncomfortable for large corporations used to annual planning cycles, but a geopolitical landscape can change monthly or daily. An adaptive culture means plans are revisited frequently and adjusted as needed, without it being seen as a failure—rather, it’s a strength to respond to new information.

Building Geopolitical IQ Across the Organization. We’ve discussed training simulations and leadership development including geopolitics. More broadly, leading companies aim to build a “geopolitical IQ” into their culture. This doesn’t mean every employee becomes a foreign policy expert, but it means cultivating awareness and curiosity about the world outside the company’s immediate business. For example, teams might start meetings with a brief discussion of a relevant global development (some companies do “world news minutes” to spur conversation). Internal newsletters might include analysis of how a new law in one country could ripple into others. The idea is to break down inward-focused mindsets and encourage employees to connect the dots between external events and their work. When employees at all levels start thinking this way, the company benefits from a multitude of sensors and ideas from the ground up.

Additionally, diversity of perspectives in leadership becomes crucial. A homogeneous leadership team (all from one country or background) is more likely to have blind spots in a global context. Increasing the international diversity of executive teams and boards can improve collective sensemaking. A person who has lived through currency crises or political instability, for instance, may recognize patterns others don’t. CEOs are thus working with HR and boards to ensure they have the right mix of talents and backgrounds to reflect a multipolar world. This includes possibly having advisory councils with external experts to challenge internal thinking. The best leaders display humility in the face of complexity—they actively seek out what they don’t know. As one Georgetown Business insight noted, leaders must “resist overconfidence and instead adopt a mindset that values adaptability and scenario planning over false precision”. The culture has to reward raising concerns and asking “what if,” rather than punishing those who challenge assumptions.

External Relationship Mastery. Today’s CEO must also be a diplomat and coalition-builder externally. This is a cultural shift from the days when government relations might be a low-profile function. Now, open dialogue with governments, international bodies, and communities is part of a CEO’s remit. Leaders need to proactively build relationships with key government officials in the countries where they operate – not just when they need something, but as an ongoing practice. Many companies have found that being at the table when regulations or policies are being formulated can prevent unpleasant surprises later. For example, some tech firms engaged deeply with the EU on data privacy rules (GDPR) to help shape workable regulations. Similarly, in industry groups, CEOs are finding common cause with competitors to advocate on issues like supply chain security or digital trade norms. These CEO networks can be a source of resilience too; in a crisis, peer companies sometimes coordinate on evacuation efforts or share intelligence, underlining that sometimes collective action is in everyone’s interest.

The concept of shaping the external agenda goes one step further: it’s about using the influence of business leadership to nudge the broader environment in a favorable direction. This could mean championing global standards that reduce fragmentation or contributing business perspectives to peace and stability initiatives. Ambitious as that sounds, there is precedent – think of the role some CEOs played in the Paris Climate Accord process or in pushing for certain trade agreements. McKinsey highlighted that CEOs have a trust and credibility advantage that “gives them influence to actively shape the rules” of the game. NVIDIA’s CEO Jensen Huang, for instance, spent years re-positioning and communicating his company’s role in the evolving AI and chip landscape, which arguably has given NVIDIA a voice in discussions on AI policy and kept it at the forefront of industry shifts. The takeaway for leadership culture: encourage your executives to engage externally, not as an afterthought but as a strategic activity. That might mean sending leaders to forums like Davos, encouraging them to write thought pieces or join task forces on issues, and celebrating those contributions rather than viewing them as time away from “real work”.

Embracing Volatility – The Opportunity Mindset. Perhaps the biggest cultural differentiator between companies that merely survive geopolitics and those that thrive is mindset toward uncertainty. The former see volatility purely as risk to mitigate; the latter see it also as opportunity to grab. Leaders set this tone. If the CEO frames every geopolitical issue as a threat, the organization will respond defensively, hunker down, and perhaps miss chances. If instead leadership communicates that disruption can be “the challenge and the chance” (as EY’s report suggests), employees will be more likely to bring forward innovative ideas about how to win in the new landscape. For example, if a competitor from Country X is suddenly unable to export due to sanctions, a company with an opportunity mindset might quickly ramp up marketing to fill the gap, whereas a purely risk-focused culture might just breathe a sigh of relief that they avoided trouble. One group of CEOs identified in the EY survey were “more confident than their peers” because they had already taken bold action amid uncertainty (completing localization, investing in transformation). Their confidence wasn’t blind optimism; it was earned by proactive moves. This illustrates a broader truth: confidence in a volatile world comes from capability – knowing you can handle surprises – which itself comes from having challenged yourself, experimented, and adapted repeatedly.

Leaders can cultivate this by rewarding initiative and calculated risk-taking even when outcomes are uncertain. A culture where employees fear making a wrong move is ill-suited for unpredictable times. Instead, leaders should empower teams to act on imperfect information when needed and then adjust, rather than wait for perfect clarity. This might involve adjusting KPIs to focus more on long-term innovation and resilience metrics, not just short-term precision. It also involves storytelling – highlighting wins where taking a chance paid off and analyzing “fast failures” in a blameless way for lessons learned. Over time, the organization becomes more daring and resilient, not brittle and anxious.

Ultimately, the Geopolitical CEO must foster a company that is at once principled and opportunistic, vigilant and daring, unified and diverse in thought. It’s a tall order, but many leaders are proving up to the task. We have seen executives steer their firms through trade wars by reinventing supply lines, through political backlashes by doubling down on core values, and through global crises by keeping their people focused and cared for. These leaders did not have a playbook handed to them; they wrote it as they went, guided by a clear strategic compass and strong cultural ethos.

As we conclude, it’s worth reflecting on the broader significance of this moment. Geopolitics has forced CEOs to expand their conception of leadership and responsibility. They must be global thinkers and local actors, statesmen for their companies and servants of their stakeholders. The fragmented global order is, in a sense, a leadership crucible. It tests whether companies can hold fast to purpose and adapt to disorder simultaneously. Those that can will not only survive – they may shape the next era of globalization (or its successor) on their own terms. In the words of an old proverb, “Smooth seas do not make skillful sailors.” The seas CEOs sail now are far from smooth. But by fundamentally rethinking strategy, structure, and culture for this new age, the Geopolitical CEO can navigate the swells and even harness the winds of change to propel their organization forward.

In the final analysis, geopolitics is not a passing storm but the new climate in which business must operate. For C-level leaders, that means evolving into Geopolitical CEOs who are part strategist, part risk manager, part diplomat, and always enterprise leaders with an eye on both the immediate horizon and the long view. It’s a challenging role—perhaps the most challenging iteration of corporate leadership in modern times. Yet, as we have seen, it is a role that can be performed with rigor, resilience, and even optimism. The companies that embrace this reality—rethinking their strategies, retooling their organizations, and reorienting their cultures—will not only better protect themselves amid global turmoil, they will set the pace in whatever new global order emerges.

Sources:

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4. UNCTAD. “Global trade in 2025: Resilience under pressure.” UNCTAD News, March 14, 2025.

5. McKinsey & Company. Cindy Levy et al. “A proactive approach to navigating geopolitics is essential to thrive.” November 12, 2024.

6. McKinsey & Company. Cindy Levy et al. “Leading amid geopolitical upheaval: Five imperatives for today’s CEOs.” November 21, 2025.

7. McKinsey & Company. “Geopolitical resilience: The new board imperative.” August 8, 2023.

8. World Economic Forum. William Dixon. “Why every company now needs a Chief Geopolitical Officer.” July 16, 2025.

9. KPMG. 2025 Global CEO Outlook: CEOs doubling down on AI and talent. October 2025.

10. EY (EY-Parthenon). Does today’s disruption provide the blueprint for tomorrow’s growth? – Global CEO Outlook Survey, September 2025.

11. World Economic Forum. Sebastian Petric. “Enhance geopolitical risk assessment with this strategy (scenario planning with emerging worlds).” WEF Agenda, Feb 2025.

12. McKinsey & Company. Ziad Haider et al. “How boards can tackle geopolitical risk.” May 6, 2025.

13. Reuters. Heekyong Yang et al. “What Samsung and Vietnam stand to lose in Trump’s tariff war.” April 12, 2025.

14. Harvard Business Review. Angela Wilkinson and Roland Kupers. “Living in the Futures” (Shell’s scenario planning). May 2013.

15. Fortune (Fortune.com). Tina Fordham interview by Vivienne Walt. “Geopolitical risk supercycle” commentary. October 2024.

16. Willis Towers Watson. “Geopolitical risk: From talk to action in Singapore boardrooms.” WTW report, 2024.

17. Bloomberg News. Bryce Baschuk, “The ‘New Neutral’ nations attracting investment by staying above the fray.” 2024.

18. McKinsey Global Institute. “Geopolitics and the geometry of global trade.” January 17, 2024.

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20. Diligent Institute/Fortune. Dottie Schindlinger comments in Fortune, October 2024.

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