Comment: Why geopolitical volatility demands continuous board attention

Boards of organisations may well have hoped that 2026 would usher in some relative geopolitical calm. 2025 had, after all, been unusually volatile: the stop/start peace talks between Russia and Ukraine, concerns over wavering US commitment to Euro-Atlantic security, mid-year air strikes against Iran that risked higher global oil prices, alongside growing military activity in the East and South China Seas.

Throw in the Trump Administration’s unorthodox international trade, tariff and economic policy, levelled against key industry sectors with as much zeal as tariffs the Administration directed at geopolitical competitors, and boards would have been forgiven for concluding that 2026 surely couldn’t be any more turbulent.

Alas, this has proven to be a false hope. This year started with US action in Venezuela, heightened Chinese military exercises around Taiwan and, from late February, fresh conflict in the Gulf triggering an Iranian reaction that has pushed oil, gas and commodity prices sharply higher – with predictable global economic consequences from which economies around the world are not immune.

That the prospect of renewed Israeli action was, from as early as early autumn last year, widely priced in as likely in G7 capitals offers little comfort to boards, who were otherwise unaware of the risk of renewed conflict in the Middle East.

Indeed, by the time US maritime forces had massed in the Gulf in mid-February, it was too late for company boards to question internal response plans with any realistic prospect of having enough time to see these updated.

Geopolitics: From Background Noise to Boardroom Disruption

But as the penny drops for many boards that geopolitics has metastasized from background noise to a sustained, ongoing driver of disruption across the global economy, a big challenge remains – not just in external risk monitoring, but in how companies translate geopolitical developments into impacts as the first step in calibrating responses.

Impacts are expanding, with transmission channels and 2nd/3rd order effects that can play out differently across industry sectors, individual businesses and even within firms that have different business lines. Geopolitical risk exposures are becoming more complex, with concentration in the domestic market no longer offering the insulation upon which many firms used to rely – and where exposures increasingly reflect a business model’s supply- and demand-side dependencies on stability in global markets and macroeconomic conditions, rather than geographic footprint.

External stakeholder expectations on this agenda are also on the rise, with a heady mix of investors, governments and regulators interrogating corporate exposures and considering what may be necessary to preserve investment value and national resilience.

What Boards Need to Rethink

What can boards of organisations, and their supporting governance teams, therefore do in response?

Perhaps the first and most obvious point is one of mindset: to recognise that the period of global geopolitical calm and uninterrupted globalisation after the end of the Cold War is obviously over. Geopolitics now pose an ongoing and systemic challenge for boards and that this, as a first step, requires developing a sustained understanding of the geopolitical risk environment.

To be fair, boards have often sought geopolitical briefings before now, but typically on an occasional basis.

This is no longer enough and, to be effective, an increased focus on geopolitical risk also needs to be accompanied by a structured approach to both impact assessment and identification of the benefits and costs of potential response options.

This is where the opportunity for governance teams lies – in leveraging the unique organisational position they hold to support development of their board’s geopolitical risk oversight approaches.

The Role of Governance Teams in Strengthening Oversight

This needn’t be hard. A first step can be to raise the following preliminary questions with the board chair, key committees and their chairs, members or specialist NEDs:

• Does the board have access to the right sources of insight to give us adequate warning of potentially disruptive geopolitical events and expert insight into material geopolitical issues more generally?
• Do we understand how geopolitical volatility may drive our emerging and principal risks and who provides the board with bespoke impact assessment from geopolitical risk, if anyone?
• Does the board have enough information on our approach to geopolitical risk when monitoring and reviewing the effectiveness of the company’s risk management and internal control framework?
• Can we learn from how boards in peer firms are responding to geopolitical risk?
• Could we make better use of existing board committees, processes and workflow to facilitate understanding of our geopolitical risk exposures?
• Do our external relationship capabilities adequately identify emerging geopolitical concerns amongst key investors, regulators and governments?
• Should we consider doing more to communicate our approach to geopolitical volatility in our market statements and broader external stakeholder relationship management?

Their position means governance teams can also equip boards with several oversight questions about the wider firm’s approach, perhaps in association with internal audit. Key themes to focus on include:

• Who in the organisation has responsibility for coordinating work on geopolitical risk?
• What specialist analytical resources do they draw on and are these used in a systematic and comprehensive way?
• What geopolitical scenarios are used in our financial viability modelling? Are these robust?
• What ongoing workflow runs off geopolitical entries in our risk registers and frameworks?
• Do management teams adequately account for geopolitical factors in strategic decisions?

The themes suggested above are by no means exhaustive, but they can help company secretaries and governance teams start shaping oversight approaches and expectations and position as a strategic enabler in the process.

To explore these themes in more detail, join us for the Chartered Governance Institute UK & Ireland’s Governance Ireland conference in Dublin on 7 May, and the 2026 CGIUKI Annual Conference in London on 7th & 8th July.