The Boardman International Blog shares insights from Boardman Members. In this post, Jean Lambert argues that boards should focus their geopolitical attention accordingly.

Roosevelt’s New Deal in the 1930’s might have been one of the solutions to the Great Depression. Yet the real saviour for the American economy was, without a doubt, the Second World War.

I am not advocating that a war would benefit Finland in any desirable way. I am here aiming to highlight a connection between geopolitics and how the economic sphere, and subsequently the companies, evolve and perform.

Since the end of the Cold War and the collapse of the USSR, the trend of the Western World has been towards globalisation. Yet, nowadays, since drones, and missiles are back in the news headlines, goods face new sorts of challenges.

In this article, we examine the relationship between geopolitics and business, and why company boards should take a closer look at it.

Geopolitics Isn’t Someone Else’s Problem

Looking widely at our European interests, the conflicts in Sudan might not be on the top of your priorities. On the other hand, there is a high probability that the war in Ukraine, US tariffs or the war in the Middle East have been on your board agenda. These events are visible and well-covered in the media. Their consequences on business do not look far-fetched.

I would like to bring your attention to the companies in which you take part in governing. What makes the headlines is not necessarily what is the most important for your business. The approach should be proactive, starting from the international exposure of your organisations, that of your suppliers and of your customers.

Understanding the key regions and bringing what is happening there to the board agenda, will not solve everything. It will however, make the organisation’s leaders better understand what concretely impacts them.

How Does It Look in Practice?

Now, let’s build a purely fictional scenario. You are on the on the board of a Finnish company which specialises in the assembly of electronic components. You sell across the European Union and are sourcing chips from Taiwan.

We will, for simplicity, disregard second-order effects during this scenario.

Your company’s interests in Finland and across the EU are obvious. You lay down the international footprint: Chip manufacturing (Taiwan, China), Raw material notably silicon (Brazil), possible supply chain disruption (Southeast Asia, Red Sea).

Adding in some real-life events, we realise that conflicts in Asia need to be thoroughly inspected, as would the evolution related to Brazil, and conflicts in the Middle East, especially the activities of Ansar Allah (“Houthis”) in Yemen, which affect whether the Red Sea route is open or closed.

This exercise, commonly referred to as Red Teaming, can be applied to any sort of company. The result will be useful for navigating the news to find what is relevant for your business and to avoid losing focus. Exceptionally, in this scenario, US tariffs would be of very little relevance.

Conclusion

To conclude, let’s remember that the point of this discussion is not, that you shouldn’t read the news. Primarily because you probably all do so which helps be more informed. But reading the news do not necessarily prepare you well as a board member.

Understand the specific risks of the companies you govern and view those events through the lens given above.

It will make you better prepared to design a strategy in modern times, better at supporting management and in a better position to inform the owners.

It is now time to get to the drawing board, grab a map and locate the geopolitical risk points for the companies you are responsible for, their suppliers and their customers. Then ask yourself, am I aware of what is happening there?

Author

Jean Lambert is working as a geopolitical consultant, firm’s head for Northern Europe and is an Owner. He is a Boardman member.

Boardman is a think tank offering professional development and visibility to international executives in Finland, through high-quality networking events and training in governance, leadership and impactful decision making.

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