Perils and dangers: How companies are responding to political risk

Why political risk matters to MNCs and how they are managing its impact

Extractive and utility companies have grown up with geopolitical risk. However, companies such as Adidas, Carillion and General Motors, point to an unconventional and surprising list of companies to have admitted to recent risk-related losses throughout the world.

Exposure to geopolitical risk – including tax or royalty changes, confiscation of assets and security concerns – can have a direct impact on a company’s top- and bottom-line. Political risk generally equals complexity, which points to a period of increased complexity in an environment of shifting international allegiances and trade agreements. Associated risks include protectionism and unfavourable regulatory changes.

  • What and where are the leading geopolitical risks for multinational corporations?
  • How are these risks being mitigated and managed?
  • How is the current risk environment changing the way companies operate and invest?
  • To what extent do investors care about a company's geopolitical exposure?