Building Geopolitical Muscle 2026

Different objectives guiding geopolitical muscle mandate FIGURE 5 Best practices Description Board and CEO sponsorshipMandate visibly anchored at the top and communicated to the rest of the organization, signalling geopolitics as a leadership priority. Board sponsorship is critical, and the geopolitical muscle needs to adopt a long-term view. Delegation of authorityThe geopolitical muscle is able to act, convene and orchestrate geopolitical responses, not simply to inform, with clear roles across functions. Expanded purpose The mandate goes beyond reactive risk management to include anticipatory and offensive approaches.Reaction AnticipationOffence DefenceOpportunistic capture Illustrations: – Capitalizing on US–EU trade negotiations to push specific provisions – Entering market vacated by competitor due to export controls Crisis management Illustrations: – Qualifying a new supplier urgently because of sanctions – Re-routing supply chains after Red Sea attacks – Exiting Russia in 2022Strategic shaping Illustrations: – Acquiring a strategic asset in (geo)politically sensitive market – Collaborating early with regulators on specific regulatory matters Future proofing Illustrations: – Stockpiling inventories for a critical product ahead of US elections – Preparing a Taiwan, China contingency playbook Source: Executive interviews – World Economic Forum, IMD Business School, BCG analysis CASE STUDY 3 Allianz: Bringing geopolitics insights where decisions are made Allianz accelerated the structuring of its geopolitical capabilities back in 2019. What began as a largely regulatory affairs function under the group CFO evolved rapidly into a broader Regulatory and Political Affairs (RPA) function. By 2022, it was elevated to report directly to the group CEO. Led by a long-time Allianz executive, the core RPA department at HQ level is supported by a regulatory and political affairs core group spanning key regions and business lines, which defines the global RPA strategy, methodologies and priorities (15-plus stakeholders) and exchanges regularly on current issues. Its mandate: help Allianz both navigate and shape the firm’s regulatory and political environment. The team reports into core decision-making bodies across finance, risk, strategy and operations. As the Head of Group Regulatory and Political Affairs puts it, “We moved from hosting three or four of our own steering committees per year to having a seat in the forums where decisions are made.”Geopolitical monitoring is anchored in a structured, data- driven approach and performed from different perspectives. The firm’s Political Stability Grid tracks political risk across 25-plus key markets. It integrates internal exposure data with external inputs and evaluates developments over multiple time horizons. Findings are delivered at least twice a year, or more frequently as needed, with optional deep dives for business units. In addition, a geopolitical risk update, delivered at least three times a year, offers deep dives into the four to five of the most significant geopolitical risks. The product portfolio is complemented by previews ahead of critical elections. A one-year scenario planning process ahead of the 2024 US election exemplifies its impact. Working across different functions, including economic research and risk management, the team ensured that strategic responses were aligned, proactive and board-ready. Source: Interviews, company analysis Building Geopolitical Muscle: How Companies Turn Insights into Strategic Advantage 14