It may sound obvious – but it’s also incredibly complex. Geopolitical risk is commanding attention in boardroom strategy again this year. From fragmenting trade to the energy transition, geopolitics is creating uncertainty and reshaping business fundamentals. In this episode we discuss how Boards can take a more proactive and less reactive approach. In this episode of our UK Governance & Compliance mini-series, we dive into the choppy waters of geopolitics. Business fundamentals are being reshaped by changes to international trade, technology, the energy transition, migration and more. These shifts are interacting with each other to create an extraordinary amount of uncertainty for boards of directors. “The real strategic question for Boards is whether they’re set up to lead in uncertainty rather than simply to respond to it,” Ashurst’s Nisha Sanghani tells podcast host Will Chalk. “Boards that see it only through a compliance, legal, or government relations lens will always be behind the reality that their organisations are operating in.” Nisha emphasises that geopolitics is now a critical influencer of long-term value creation. And she considers today’s new world order where public trust in governments and social cohesion have eroded but, in many societies, trust has shifted towards business. “Trust today isn't built through statements. It requires leadership that balances compassion to build legitimacy, robustness to provide direction, and the ability, of course, to reset, to adapt openly as conditions change. And that's why this issue belongs squarely in the boardroom.” Ashurst’s Florian Drinhausen then discusses how approaches to ESG increasingly vary across political jurisdictions. “Today, Boards have to manage a legal environment where local rules tend to conflict far more with each other than in the past,” he says. Having pinpointed the main challenges, Nisha and Florian then describe how boards can take a proactive approach to them. Florian emphasises the need for pragmatism over perfection, while Nisha sums it up thus: “The shift Boards need to make over the next three to five years is from thinking about geopolitics purely as a risk to treating it as a strategy.” To listen to this and subscribe to future episodes in our governance mini-series, search for “Ashurst Legal Outlook” on Apple Podcasts, Spotify or your favourite podcast player. You can also find out more about the full range of Ashurst podcasts at ashurst.com/podcasts. To receive updates and alerts on the issues raised in this podcast mini-series, subscribe to Ashurst’s regular Governance and Compliance Updates. The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Listeners should take legal advice before applying it to specific issues or transactions.See omnystudio.com/listener for privacy information.

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