Geopolitics is the issue that boards cannot shake

Geopolitics is the issue that boards cannot shake. The tug-of-war between ideologies continues to rage, and until that dies down, boards and their companies have tricky waters to navigate. 

The last few weeks have produced more upsets in world politics. In the United States, Democrats have regained control of both houses of Congress to a degree even some of their best-case scenarios didn’t predict, in a stunning pushback against Donald Trump. 

It follows the pivotal presidential election in Brazil just a few weeks ago, where voters rejected the pollsters’ favourite, right-wing Flavio Bolsonaro, in favour of re-electing left-wing Luiz Inácio Lula da Silva. 

These are scenarios most couldn’t have seen even six months ago, yet here we are… again! It’s not the first time we’ve been thrust into ballot-box shocks in this decade. “Upset” is the theme of this chapter of world politics. And make no mistake: it filters strongly down to business leadership.

Most boards and executives will be watching results like these and wonder what comes next, even those beyond the borders of where an election might be taking place. They know that modern geopolitics extends beyond physical frontiers, question strategies that have worked for years or, more recently, strategies that have just been finalised on the back of a previous geopolitical upset, and now the script is re-flipped. 

We have seen the worry over geopolitics surface repeatedly in governance circles:

• EY called it “the most disruptive of board priorities” on the back of data showing that, in 2025, 76% of boards made a decision prompted by geopolitics – up from 21% in 2021. 
• According to PwC, nearly three-quarters (73%) of directors are concerned that heightened geopolitical conflict will affect their company over the next three years.
• Meanwhile, Deloitte’s annual CFO survey in Europe highlighted geopolitical risk as the top concern for both 2025 and 2026, with the number continuing to grow. 

While internal elections don’t define geopolitics on their own, they do define the forces that get to make the rules that boards must follow. Inevitably, the sentiment from voters will be felt inside boardrooms, often sooner rather than later. 

The elections in the US and Brazil are a big part of the story, but they are by no means the only part. The spotlight will soon switch to Europe; a general election in Spain will take place at the end of November 2026 and threaten to unseat the left-wing government there. Meanwhile, in France, crucial presidential elections are scheduled for April 2027. The right-wing Marine Le Pen is the current favourite, and many of her policies include revamping France’s contributions to, and relationship with, the European Union – a position that other states like Germany may also adopt depending on election results in a few years’ time. 

The playing field continues to change; clarity and consistency remain unachievable, and boards simply need to adapt to stay relevant. There’s no room for standing still or letting key meetings go by without asking tough questions.

Rulebooks, for one thing. 

Elections tend to result in different influences over business legislation and compliance at the governance level. The results in the US state of Texas are an example that speaks for itself. Long-time Republican Governor Gregg Abbott was ousted by Democratic challenger Gina Hinojosa, who is far more vocal about regulating businesses and ensuring greater elements of stakeholder capitalism in decision-making. Some companies (including those of Elon Musk) have relocated there because of its perceived pro-business attitude. Now, they have some decisions to make. 

Following new rulebooks is one thing: getting up to speed on multiple rulebooks around the world is another, especially for companies that operate cross-border, or need to combine compliance with state and federal legislation. This is where the real geopolitical shocks just keep on coming, because rulebooks don’t just change with political victors; they change with tariffs, supply chain issues and conflicts too. Boards need to be in a consistent state of readiness to adapt to change in this area. 

And while we’re on the subject of conflict, it’s another big example.

Wars and the deterioration of once-peaceful relationships have defined this decade. None of that looks likely to be solved in a hurry. As long as firm opposition continues between blocs like the EU/US and Russia, the US and China, not to mention the intense disagreements over the conflict in Israel and Palestine, boards will continue to face tough choices. 

There will be new sanctions to obey, supply chains to change, political movements to endorse, or not endorse, or even stay silent on. Directors need to weigh it all up on a monthly, if not quarterly, basis. They need to combine all stakeholder opinions into achievable decisions that make sense. 

For that, they need the right experience and know-how. There’s no escaping it.