Geopolitical dynamics have evolved recently and will continue to grow more complex, with even more impact in the foreseeable future. Companies operating in more than one jurisdiction are particularly vulnerable to geopolitical risks, although these can also present opportunities. Can boards afford to steer clear, or is the boardroom the best place to build resilience and pave the way to opportunity?
In this podcast, Dr Sabine Dembkowski Founder and Managing Partner of Better Boards discuss geopolitical challenges with Nassib Abou-Kahlil, named one of the 20 top corporate legal officers by the Financial Times in June 2021. Nassib held senior legal roles at Yahoo!, GE Oil & Gas, Etisalat and TMF Netherlands and most recently as Chief Legal Officer at Nokia.
“Keep an open mind; the world is extremely diverse”
Nassib opens by observing that the complexity around Geopolitics is enormous but not insurmountable. In his mind, it is vital to keep an open mind. He relates his experiences with new challenges and working in numerous jurisdictions, involving not just managing complex laws, but also accommodating values and reconciling contradictions, whether cultural, legal or between values in the multi-jurisdictional environment. This is a delicate exercise in understanding, foreseeing, mitigating and managing.
“There is no one size fits all”
Nassib explains that he believes there is no ‘one size fits all’ approach, so whatever approach is taken needs to be well adapted to the specific business and relevant circumstances. This must be taken into account when assessing the impact of a particular development and is achieved through utilising regulators and other geopolitical experts and analysts. Nassib describes how insights alone neither help solve nor achieve anything, so mitigation is necessary.
“Yes, this is a board-level discussion… …not in every detail, but at a strategic level”
In Nassib’s view, it is essential for geopolitical issues to be a board-level conversation, and the board is potentially one of the bodies best placed for future-proofing organisations. He explains that one of the most important tasks of the board in this context is weighing in on the strategy of a company, and assessing and deciding how a company addresses its geopolitical risks.
“Lack of diversity and diverse perspectives, and challenges in perspective is potentially one of the greatest red flags”
Nassib holds the view that the biggest threat to boards and future-proofing is the potential lack of diversity on the board. In his experience, the power of diverse perspectives invariably leads to better decision-making and broader insights.
“The biggest risk in diversity is defining diversity narrowly”
Nassim relates how he has always thought of diversity in the broadest sense of the word, including cultural experience, racial diversity, social mobility, and other aspects of diversity. Many companies are operating in an extremely diverse environment, yet their boards do not reflect this.
The three top takeaways from our conversation are:
1. Geopolitical dynamics are here to stay, so keep in mind that today’s decisions may come back to haunt you tomorrow. If you exit a country today because of the geopolitical dynamics, this doesn't mean that you won’t want to re-enter it later, and people will remember your actions.
2. Focus on diversity, looking for potential and not experience, defining diversity in the broadest sense and committing to it.
3. Build awareness, including self-awareness, by understanding your geopolitical dependencies your footprint and your operations.