Throughout the pandemic, risk management and crisis response systems had to adapt in real time to a rapidly changing global business environment. This era has provided a strategic opportunity for organisations to improve political risk identification and monitoring. In this report, EY shares the steps companies should take to engage in more proactive and strategic political risk management, as well as some current concerns.
Key takeaways include:
Concerns about geopolitical risk appear to be driven by US-China tensions and the geopolitics of COVID-19. In response, 49 percent of global executives expect political risk to be higher in the coming year than it was last year.
While 53 percent of companies globally integrate political risk into the broader strategic planning on a proactive basis, 10 percent of executives report their company does not do it at all.
Political risk governance appears to be siloed in many companies. Only 40 percent of companies use a committee to govern political risk management, indicating that responsibility for this resides within a single function or individual in the majority of companies.