How geostrategy can help boards navigate risk and build resilience

Findings from the EY-Parthenon Geostrategy in Practice Survey 2025 revealed that in 2021, only 26% of boards worldwide took action, on average, across seven identified geostrategy areas. In 2025, that share rose to 76%. The top two areas of board action today are: regularly assessing the impact of political risk on the company’s existing strategy (84%) and receiving regular political risk briefings from company functions such as public affairs or risk management (82%).
 

Assessing the political risk impact on the current strategy and geopolitical briefings, whether from internal functions or external advisers, are only the tip of the iceberg. When and how boards engage on geostrategy matter as well. Despite the significant political risk impact on companies’ operations and strategies, only about a third of boards include political risk as a frequent agenda item. More than half include it as an annual agenda item, which is likely too infrequent to effectively manage an increasingly dynamic geopolitical environment.
 

2. Strengthen board oversight

Boards should also formalize and allocate responsibility for geopolitical risk oversight to ensure consistent attention to geopolitics. For example, there could be audit committees to oversee compliance with sanctions and export controls and risk committees to conduct scenario planning around geopolitical events and monitor key risk indicators.  Nominating and governance committees could plan for board and executive succession planning and ensure future leaders have the right skills and experience. Strategy committees could ensure the business model and capital allocation are resilient to geopolitical shifts.
 

Boards should build the necessary skills and knowledge while encouraging directors to challenge internal assumptions and broaden strategic foresight. This does not mean acquiring deep expertise, but rather achieving geopolitical fluency through advisory councils, partnerships or board-level briefings, for instance. Boards should also identify relevant internal or external experts  and receive regular briefings with open-ended discussions from them on how global or political risks impact specific operations.

3. Determine who has a seat and who needs one

Geopolitical crises call for a cross-functional approach. For instance, in technology companies, political analysis and decision-making will involve the supply chain, procurement, manufacturing, finance, strategy, government affairs and legal teams. In a life sciences company, the risk assessment will be jointly determined by the supply chain, risk and legal teams, which then present their recommended strategic response to the board.
 

Effective governance is cross-functional and collaborative, requiring oversight that enables various teams to complement one another while supporting coordination across the geostrategic areas. Hence, it is not just the number of executives at the geostrategy table that is important — who is at the table is key too. The chief risk officer, general counsel, chief compliance officer and head of public policy are generally the key members who need to be on hand to work with the board.
 

4. Drive cross-functional execution

Geopolitical considerations should be embedded in the company’s core decision-making processes. In addition to including the topic on the board agenda and in committee deliberations on strategy, risk and major investments, a geopolitical impact assessment should be considered for all major projects. 
 

The board should receive regular briefings on the company’s functions to better understand the impact of geopolitical shifts on operations and strategy. Periodic deep dives into the geopolitical outlook and cross-functional risk assessments (e.g., by the finance and operations departments) can help in decision-making about future competitive positioning.

5. Prepare for the unexpected

Risk scanning is key to being better prepared for unexpected events. To that end, companies should improve their political risk identification and monitoring systems. Monitoring of political risks should be included as part of a company’s risk register or other risk identification processes and this intelligence should be regularly shared with the board.
 

Scenario analysis can help identify risk mitigation measures and plan for otherwise unforeseen political risk events. The range of actors and risks across geopolitical boundaries, markets, industries, regulators and society creates a dizzying array of potential outcomes. Scenario analysis helps structure that uncertainty in an actionable way, so organizations can respond quickly to new situations.

6. Build risk analysis into investment decisions

Boards that apply a geopolitical risk lens to their strategic decision-making are likely to have greater confidence in navigating different markets. For example, having an M&A strategy and regional development plan can save companies time and resources when it comes to their growth and investment efforts.
 

Scenario planning tools can help companies assess how political risks may affect their workforce mobility and cross-border supply chains. Incorporating political risk analysis into due diligence processes can also focus planning on market entry and global footprint decisions. Companies should also consider how their political risk management and innovation decisions may be intertwined and make adjustments. Businesses need to ensure they have the necessary governance frameworks to integrate political risk analysis into their strategic planning and broader risk management processes. This would enable them to seize any opportunities that the shifting political environment may present.

7. Adapt supply chains to geopolitical realities

In the face of dramatic international trade policy changes, tax and tariff reforms, geopolitical disputes and environmental regulations, companies may be compelled to shift to segmented supply networks. Rather than creating resilience through high safety stocks, companies can use other techniques. These include agile and strategic spare capacity, supplier material buffers, postponement strategies (where final assembly happens in the market of consumption) and higher equipment efficiency — at the right, segmented stages of the supply chain.
 

This supply chain reset involves more than just tinkering around the edges. It impacts the entire business model — from strategy, marketing and design to sourcing, manufacturing, packaging, storage and transportation.
 

However, moving to segmented supply networks requires sector-specific dynamics and the entire supplier ecosystem to be orchestrated. Creating a strategic supply chain segmentation strategy and roadmap, supported by geostrategy, enables business leaders to allocate growth capital and support long-term segmentation goals.
 

The reset is not a “one-and-done” proposition. Tactical operations and supply chain teams will need to continually assess whether additional actions are necessary based on new tariffs and trade policies, shifting regulatory environments, talent availability and other factors. A dynamic supply chain gives flexibility in the current geopolitical landscape.