Geopolitical turmoil is shifting the ground beneath business leaders’ feet. Executives are navigating waves of new tariffs, fallout from conflicts in Europe and the Middle East, escalating tensions in Asia, and an expanding web of policy measures through which governments seek to secure economic and strategic advantages. In response, leading global companies are upgrading their sources of insight about geopolitical trends, ensuring strong oversight from their boards and leadership teams, adapting their business models to operate globally in a fragmenting world, cultivating foresight through scenario planning, and developing strategies for managing geopolitically related tensions within their organizations.
Another critical element of geopolitical resilience is heightened engagement with policymakers and other external stakeholders. At a time when rules governing global trade and business change rapidly and perceived geopolitical affiliations can reverse a company’s fortunes, defining the corporate narrative and deftly managing relations with governments, regulators, and other geopolitical influencers are crucial to success. Companies are increasingly “instruments of geoeconomic policy,” says Edward Fishman, a geoeconomics expert and author of Chokepoints: How the Global Economy Became a Weapon (Elliott & Thompson, March 2025). “However, they have agency, through their advocacy and compliance efforts, in how the policy is shaped and implemented.”
To understand how enterprises are adapting their corporate-affairs functions to meet the new demands, we surveyed about 900 executives and interviewed a dozen corporate-affairs experts with experience in sectors ranging from mining and financial services to pharmaceuticals and technology.1 Our findings suggest that corporate-affairs teams are being tested as never before in what one four-decade veteran of the function calls “unprecedented times.”
Geopolitics tops corporate-affairs agendas
Geopolitics has always been part of the corporate-affairs portfolio. With responsibilities that typically encompass government and regulatory affairs, communications and public relations, and sustainability (some functions also cover compliance), professionals in this field are on the front lines of helping their organizations navigate geopolitical risk. However, they face a much more challenging environment today than they did in the past.
“Since the fall of the Berlin Wall, we have lived in a world characterized by remarkably stable geopolitics,” says Rupert Younger, a seasoned corporate-affairs leader who founded and heads up the Oxford University Centre for Corporate Reputation. “Now geopolitical complexity and unpredictability are back, but today’s boards, executives, and corporate-affairs teams have little muscle memory to rely on when it comes to navigating these more volatile conditions.”
Indeed, business leaders view trade policy shifts and geopolitical instability as the leading risks—by a wide margin—to economic growth globally (Exhibit 1).2 However, management’s focus on geopolitical risks doesn’t match the potential impact of these issues. Only 28 percent and 15 percent of respondents say that trade policy and geopolitical instability, respectively, are top leadership priorities at their organizations. In contrast, investment in AI is cited as the top priority by the largest share (40 percent) of respondents.
This disconnect likely reflects management’s uncertainty about the best ways to respond as multiple geopolitical drivers demand simultaneous action. The corporate-affairs teams responsible for guiding those responses are themselves learning to navigate the shifts.
Karthik Ramanna, a professor of business and public policy at the University of Oxford who has written about geopolitics’ effect on corporate policies, notes that institutions are grappling with how to take positions that can survive shifts in policy direction. “If you don’t play the short game, you’re not around to play the long game, but if you only play the short game, you’ll find yourself outcompeted by your peers in the long term,” he says.
Three trends in particular are putting pressure on corporate-affairs functions:
- Expanding use of geoeconomic tools: Policymakers are increasingly using tariffs, industrial policy interventions, sanctions, and export and import restrictions to pursue goals that range from strengthening national security to bolstering domestic companies’ supply chains (Exhibit 2).3 Business leaders look to corporate-affairs functions to monitor, assess, and either capture opportunities around or mitigate the impact of these measures, from engaging with policymakers to developing compliance programs.
- Scope and pace of regulations: The volume of new rules and policies and the speed with which they’re changing are testing corporate-affairs teams’ ability to stay on top of the regulatory landscape. In the United Kingdom, for example, financial firms report that their compliance, legal, and audit costs have tripled since 2009, with compliance outlays soaring by 138 percent since 2017.4 One arena of potential disruption is what the government relations leader at a technology multinational calls data sovereignty contagion. “If countries start deciding they need local providers to store data amidst geoeconomic fissures, that will disadvantage a US provider,” he says. Further complicating the regulatory picture is some governments’ shift away from using established consultative processes and channels toward announcing policy changes through social media, which can catch companies and their corporate-affairs teams off guard.
- Rising expectations of corporate patriotism: Having spent their careers in an era of hyperglobalization, business leaders must now balance their companies’ global spans with the need to show alignment with the geoeconomic agendas of their home countries. Some governments are asking enterprises to explicitly demonstrate the value that they add to their home economies and to prioritize core national-security and economic interests in their business decisions. In some cases, they’re even investing in strategically important industries. The US government, for example, recently acquired a stake in Intel and is considering investing in other companies critical to national interests.5 Enterprises also increasingly face pressure from their governments to curb dealings with geopolitically distant6 regimes and, in some cases, find themselves becoming proxies in trade disputes.
The use of sanctions has more than tripled since 2019, significantly increasing the complexity of compliance for global firms. To navigate a rapidly evolving and often overlapping web of sanction regimes, corporate-affairs teams need sophisticated risk management and due diligence processes.
Traditionally, export controls applied largely to items with military uses, but many governments are implementing such controls on other sectors. For example, globally, restrictions on exports of industrial raw materials increased fivefold between 2009 and 2023. These restrictions usually target cutting-edge critical technologies, such as semiconductors, AI, and quantum computing, but can also apply to legacy products, such as software encryption.
Choosing where to invest is becoming increasingly complex as governments move to regulate both inbound and outbound investments. While such screening policies have long been used to protect national security and economic interests, their use has expanded sharply. The number of countries using investment screening has grown ninefold since 2005, largely focused on sectors such as semiconductors, AI, energy, and critical infrastructure.
These three challenges are raising the stakes for corporate-affairs functions. “Norms are being challenged every day—abnormal is the new normal,” says a corporate-affairs leader in the finance industry. “The entire understanding of trusted authority has changed. How do you reestablish trust in a world where the paradigm is shifting?”
Upgrading corporate affairs’ geopolitical capabilities
We asked corporate-affairs leaders at leading multinational companies how they’re evolving their functions to better respond to today’s geopolitical and trade environments. Based on those conversations and our experience working with clients, we’ve identified a playbook of five actions that can help teams navigate geopolitical tumult: mapping your world, honing your narrative, optimizing your engagement, adapting the function’s organizational structure, and investing in new capabilities.
1. Map the world
The first step is to identify the trends most relevant to the company’s business. Leaders can then quantify those trends’ impact on the organization, its employees and customers, and society at large. Appraising the value at stake is critical to understanding the level of risk, but only 9 percent of the organizations that we surveyed report rigorously doing so. Mapping the world involves three components:
- Assess exposure. Using data and statistical modeling, leaders can determine a company’s exposure to geopolitical factors. It’s important to distinguish long-term structural shifts (such as climate action as an arena of competitive industrial policy and the transition from globalization to a fragmented multipolar world) from transient geopolitical events. For example, the accidental blockage of the Suez Canal by a grounded tanker in 2021 didn’t signal a systemic change, but recent tensions around the Panama Canal are symptoms of intensifying strategic competition over the control of major shipping routes.
- Quantify the value at stake. Corporate-affairs teams can estimate the enterprise value at stake in different geopolitical scenarios by using a five-step methodology (Exhibit 3). This approach quantifies the impact of best-case and worst-case scenarios on a company’s operations and financial performance, accounting for both risks and opportunities.7 Teams can then frame scenarios to identify “corner solutions” (at the limit of extreme cases) to potential outcomes. For example, a set of geopolitical scenarios could include the following:
- Scenario one (global openness): The world reverts to World Trade Organization-style consensus, with free movement of goods, capital, and people.
- Scenario two (archipelago): The world fragments into regional islands, with some intra- and interregional flows.
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Scenario three (troubled waters): Global trade follows the archipelago pattern but with heightened barriers to flows of goods, capital, and people.
After assessing a company’s exposure and value at stake, leaders can determine the issues that they should prioritize and the capabilities they need to strengthen.
- Identify key stakeholders. Corporate-affairs teams should consider which stakeholders matter most to their priorities. Have new advisory entities or mechanisms been established that sit alongside or atop existing government departments and will formulate policy affecting the company? Which entities or individuals are competitors interacting with to advance their agendas? Answering such questions can help leaders produce plans of engagement for the priority topics.
2. Hone your narrative and strategic offering
Having mapped the company’s world, corporate-affairs leaders should sharpen their narratives about their priority issues. That entails determining not only the overarching message but the language that encapsulates fundamental points, how broadly to deliver that message publicly, and who should serve as the main spokespeople:
- Refine the message. The core message should be simple, clear, and tailored to each stakeholder. Several corporate-affairs leaders we spoke with are today laser focused on showcasing to their home governments how their companies are creating jobs and investing in domestic economies. When trade measures create disruptions in imports or supply chains, some leaders have sought to highlight the implications of those measures or seek exemptions based on distinct needs.
- Lead with insights. Framing engagement as sharing information rather than making requests tends to forge stronger relationships with stakeholders. “Be a source of truth for governments,” an expert at a professional-services firm advises. “Don’t say, ‘This is what I need from you,’ but instead provide factual expertise.” For example, the government affairs team at a leading global financial-services firm shares internally developed geopolitical analyses and scenarios with government officials not only to explain the context and consequences of government policies but also to deepen relationships with officials.
- Fine-tune the language. Specific words matter. For example, in light of the US government’s establishment of the National Energy Dominance Council, the previously prevalent term “energy security” now has less resonance, one corporate-affairs leader notes. In Europe, the term “lobbying” has a negative connotation and is usually replaced by “advocacy” or “active engagement.” “You’re packaging the same thing differently to be culturally effective,” says another corporate-affairs expert.
- Set the right “volume.” In cases in which companies are committed to practices that a new government doesn’t support, they can opt to be less vocal about those policies to avoid attracting scrutiny. “We’re not changing the radio station but changing the volume,” says the corporate-affairs leader at a pharmaceutical company. In contrast, some enterprises’ strategic priorities are leading them to turn up the volume. A major US-based technology company, for example, issued a public statement signaling its commitment to the EU market despite trade tensions between the two regions. Such gestures are valuable, says a corporate-affairs leader, because “in Europe, just being a US company can be a liability at the moment.”
- Use top leaders as spokespeople. Who delivers the message carries weight. Many CEOs are cultivating personal relationships with government decision-makers and demonstrating engagement in those leaders’ priorities. Indeed, in the current geoeconomic climate, CEOs need to act as chief commercial diplomats. A corporate-affairs leader at a global technology firm puts it bluntly: “If you are a CEO who doesn’t like it, get to like it.” It’s a difficult role that may require engaging in a form of shuttle diplomacy between officials in the company’s home market and those in geopolitically distant markets. The objective is to ensure that the company can operate effectively at home and abroad without being seen as a proxy for its government.
3. Optimize your engagement
Corporate-affairs leaders emphasize the importance of engaging with critical stakeholders before those stakeholders’ assistance is needed. They also caution that while hyperengagement is necessary, the access it earns can be fleeting as government priorities shift. “You're only as good as your last deal with an administration,” says Ramanna. Optimizing the engagement includes the following actions:
- Focus on appropriate government levels. The individuals who can be most helpful aren’t always the top officials. In regulatory organizations, for example, engaging with leaders on committees responsible for relevant policies will likely be more productive than outreach to the organization’s highest level will. Similarly, cultivating relationships with state or provincial officials may be more fruitful than reaching out to the top echelons of federal government will. The engagement’s impact can be amplified through industry and government associations, foreign ambassadors, and joint-venture partners. Corporate-affairs leaders caution, however, that third parties are “no substitute for explaining your position yourself.”
- Select the right channels. Leaders should consider the channels and media (including social media platforms) most likely to convey their messages to the desired audience. Attending or sponsoring business and geopolitical forums that are preferred venues for their stakeholders can provide valuable opportunities to engage directly with regional government officials in markets vital to strategic priorities.
- Calibrate visibility. Business leaders need to consider their organization’s visibility in major capitals and stakeholder relationships. Borrowing the frame of Isaiah Berlin’s essay “The hedgehog and the fox,” some companies, like foxes, are moving nimbly in a fluid operating environment, while others are adopting a hedgehog-like approach of scaling back their visibility. One leading investment firm, for example, decided to scale back its government affairs team in Washington, DC, in part because its exit from certain geopolitically sensitive markets has reduced its US regulatory risks.
- Consult with peers. All companies are on this same journey, albeit facing different obstacles. “Learn from your peers, including in other industries,” says the corporate-affairs leader at a mining company, “and share what works—and what doesn’t.”
4. Adapt the function’s organizational structure
The corporate-affairs function has traditionally operated above the fray of day-to-day business, often working directly with the CEO on high-level strategic issues. Those days are no more, according to several corporate-affairs leaders. They recommend adapting the organizational structure in several ways:
- Embed in the business. Leading organizations are integrating corporate-affairs teams into their business units. To build business leaders’ trust, “you need to show them the direct impact of your function on their license to operate,” says the pharmaceutical corporate-affairs head. Such shifts materially change the function’s responsibilities, this leader notes. For example, to support rollouts of new vaccines, the corporate-affairs team previously developed high-level reports on government and patient confidence in the treatments. Today, the team works directly with commercial leaders on ensuring that the vaccines are delivered, embraced in the market, and reimbursed by insurance plans. “The pressure on us is intense,” says the corporate-affairs head. “We no longer have capacity for ‘nice to dos,’ only the ‘must dos.’”
- Formalize metrics. Corporate-affairs functions have tended to rely on soft activity metrics such as reach and number of stakeholders met. Younger recommends tying those metrics to business outcomes by linking the day-to-day activities of corporate affairs to the main operational and functional departments. “By supporting [those units’] core KPIs, corporate affairs can demonstrate its relevance and impact on the organization while also building a deeper understanding among senior executive colleagues about the strategic value of the function and its role.” Detailed stories of impact can also help highlight the function’s value to the business.
- Launch campaigns for high-priority issues. Experts stress the importance of organizing focused efforts on high-priority themes. “Don’t have communications, social impact, and government relations in different areas,” one leader says. “All global facets should be combined and managed from one place that stays connected 24/7.”
5. Invest in new capabilities
To gather intelligence on emerging developments, engagement with decision-makers isn’t enough. Corporate-affairs teams need both holistic views on how geopolitical developments can affect their companies’ operations and analytics on public statements and sentiment to help them differentiate the signal from the noise:
- Upgrade geopolitics expertise. For some companies, such as those in defense or critical-infrastructure sectors, navigating geopolitics is already hardwired into the business. Managing directors at the country level typically spend more than half their time engaging with governments, and sales representatives gather intelligence from customers on the best ways to navigate local regulations. Most other companies today lean on geopolitical consultancies to provide guidance, but Younger believes that this approach likely won’t suffice for long. “Leadership should be thinking about who could become your chief geopolitics officer,” he says. “Units that sit under corporate affairs are well suited to managing geopolitics but are understaffed to deal with the huge influx of geopolitical concerns.” One solution is to establish geopolitical-risk units that create integrated views based on input from internal and local teams, advisers, and other sources.
- Leverage AI. Leading enterprises are creating AI lighthouses incorporating analytical, generative, and agentic AI to reimagine their corporate-affairs workflows. For example, an AI agent can automate a communication campaign cycle, from setting the requirements to generating content to testing messages to tracking impact. Teams can also use gen AI to create briefings, combining external sources of insight on stakeholders with internal insight on policy positions and lines to take. The shift is steadily taking hold. OpenAI CEO Sam Altman has gone so far as to predict that “95 percent of what marketers use agencies, strategists, and creative professionals for today will easily, nearly instantly, and at almost no cost be handled by AI.”8 However, as AI-gathered intelligence becomes increasingly commoditized, “teams need to supplement it with direct knowledge of events only humans can provide,” cautions Younger.
We can only see a short distance ahead, but we can see plenty there that needs to be done.
The famous British cryptographer’s words can serve as inspiration for corporate-affairs leaders seeking to crack the code of effective engagement with stakeholders. A connected but increasingly contested global landscape is testing their capabilities in unprecedented ways. Yet our research reveals that to create strategic tailwinds for an organization, they can’t sit still. Effective teams are actively mapping their worlds, honing their narratives, optimizing their engagement (from the CEO down), adapting their organizational structures, and investing in new capabilities. In short, they recognize that in the new age of geoeconomics, the imperative is to shape or be shaped.
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