In today's rapidly changing global landscape, Indian corporate boards face unprecedented challenges that extend far beyond traditional profit and governance concerns. According to RPG Group Chairman Harsh Goenka, geopolitical tensions have become the central focus for business leaders worldwide.
The Age of Perpetual Disruption
Corporate boards, traditionally responsible for financial performance and governance standards, were never designed to handle the complex geopolitical realities of today's uncertain global economy. What was once dominated by concerns about dipping profits or reputational damage has transformed into a landscape where drone strikes in the Middle East impact oil prices, US trade restrictions reshape supply chains, and cyber attacks can paralyze global operations within hours.
The unexpected has fast become the norm, creating what Goenka describes as the Age of Perpetual Disruption. A recent Deloitte survey underscores this shift, revealing that more than 60% of global leaders now consider geopolitical unpredictability their greatest concern, surpassing even inflation or market volatility.
Visible and Invisible Threats
Geopolitical risks manifest in various forms, from high-probability threats like regional instability in the Middle East and growing trade protectionism to medium-probability risks such as Russia-NATO escalation and North Korea's provocations. Even low-probability events like European fragmentation can significantly reshape global finance and consumer sentiment.
The Russia-Ukraine conflict serves as a stark reminder of how quickly geopolitical shocks can destroy value. Over 200 Fortune 500 companies, including giants like IKEA, McDonald's and Volkswagen, were forced to suspend or exit operations in response to the conflict.
Goenka emphasizes that boards must learn to see the world through both radar and sonar. While radar identifies visible threats like wars, elections and trade disputes, sonar senses underlying forces such as populism, social unrest, technological nationalism and data weaponization.
Building Resilience Through Strategic Adaptation
In response to these challenges, companies are fundamentally adjusting their strategies. The new business vocabulary includes terms like near-shoring, friend-shoring and re-shoring as organizations relocate operations, reconfigure supply chains, delay investments and exit volatile markets.
This marks a profound transformation from a world driven purely by efficiency to one that prizes resilience and adaptability. Forward-thinking companies are already institutionalizing this approach by:
- Creating cross-functional geostrategic committees
- Maintaining comprehensive risk dashboards
- Conducting tabletop simulations
- Consulting external think-tanks for periodic briefings
Board composition is also evolving beyond traditional diversity metrics. Former diplomats, defence analysts, technocrats, cyber experts and professionals with deep international experience are increasingly valuable additions who can provide crucial perspectives for navigating complexity.
For Indian corporations specifically, this conversation holds particular relevance. India stands at the crossroads of global trade, technology and energy politics. While friend-shoring trends present significant opportunities, India remains exposed to volatility in oil prices, semiconductor supply and regional unrest.
Goenka recommends that boards institutionalize three key disciplines: intelligence integration that collects both quantitative and qualitative data, scenario rehearsal to test strategic assumptions against multiple potential futures, and adaptive governance that enables decisive action when circumstances change overnight.
The pandemic demonstrated that resilience is cultivated over years, and geopolitical disruptions represent the next great test of that resilience. The companies that endure will be those that can adapt operations across regions, protect digital and physical assets, safeguard employees in hostile environments and maintain public trust when shocks inevitably occur.
As Goenka concludes, geopolitical risk is not a passing storm but the new operating climate. The real question for every board is no longer how safe they are, but how ready they are to navigate the world as it truly is.
