Building Geopolitical Muscle 2026

2.1 Establishing the mandate Our chairman told the board, ‘We need more international expertise.’ That led to re-establishing our international relations function with a mandate that spans both long-term strategic foresight and short-term tactical operational guidance. Head of International Relations at an energy company Many board members, CEOs and other executives now recognize the need for empowered geopolitical muscle: a dedicated capability with delegated authority to anticipate and orchestrate the company’s response to global developments. Companies with long- standing exposure to geopolitics (such as in energy or commodities) tended to evolve such functions earlier. For others, two inflection points accelerated this realization: the COVID-19 pandemic in 2020 and Russia’s full-scale invasion of Ukraine in 2022. These crises revealed that ad hoc coordination or personal networks could not substitute for institutional readiness. Ownership of geopolitical muscle FIGURE 4 The geopolitical muscle acts as orchestrator, not final decision-maker. How this authority is delegated differs by company design and maturity (see Figure 3): –Distributed ownership: Every function and business unit handles geopolitics independently within its scope and reports insights upwards. This keeps decisions close to operations and market realities but often results in fragmented narratives, duplicated work and limited enterprise-wide synthesis. In this model, the CEO and board bear the burden of integration. –Shared ownership: Responsibility is split among two or three functions – for example, risk manages monitoring and crisis response; strategy focuses on anticipation and opportunity. This allows complementary angles and checks and balances, but requires strong coordination mechanisms to avoid gaps or overlaps. –Concentrated ownership: A single unit is able to coordinate and advise across the organization. This model localizes accountability, unifies external messaging and enables systematic reporting to the board. To remain effective, the unit must stay deeply embedded in the business and earn internal credibility as translator between geopolitical developments and commercial impact. Across firms, mandates tend to span two axes: defence (risk) vs. offence (opportunity) and reaction vs. anticipation, producing four distinct objectives. Many companies interviewed described an evolution in their priorities as they strengthened their capabilities from reactive crisis management towards focusing more time and effort on anticipatory, offensive moves as their capabilities mature.Distributed ownership Fully autonomous, organic ad hoc coordinationShared ownership Two (or three) functions sharing coordinationConcentrated ownership One function centralizing coordinationBoard of directors and CEO Geopolitics as historical purview Source: Executive interviews – World Economic Forum, IMD Business School, BCG analysis Building Geopolitical Muscle: How Companies Turn Insights into Strategic Advantage 13