Yesterday I sat on a panel at the Consulate General of Finland in New York. Finland is a country that punches above its weight geopolitically, led by President Alexander Stubb, whose pragmatic realism reflects the outlook of a country that joined NATO recently and shares a 1,340-kilometer border with Russia. The discussion was sponsored by Inclus, a Finnish enterprise risk management software platform built around a sensible proposition: companies make better decisions when risk frameworks are developed collaboratively across the firm, rather than handed down in isolation.

On the panel with me were experts in cybersecurity risk, environmental, social, and governance risk, and enterprise risk management methods and practice. I was there to talk about geopolitics, which is plainly one of the hot topics in risk management right now.

The other, of course, was AI.

That too was revealing. AI is rapidly becoming part of the machinery through which firms identify, classify, monitor, and communicate risk. Geopolitics, meanwhile, is increasingly part of the operating environment those tools must help firms navigate. One is a new layer of capability. The other is a growing source of pressure on the business. The challenge is to bring the two together without mistaking better tooling for better judgment.

What struck me this morning was not simply that geopolitics has become prominent. It was something more specific.

Much of what gets described as geopolitical risk can, and should, be absorbed into existing corporate risk frameworks. That is not how the subject is usually discussed. Geopolitics tends to arrive wrapped in headlines and crisis language. It is treated as something exceptional, almost mystical: too large, too fast-moving, too strategic to be incorporated into normal management disciplines.

But from the standpoint of corporate management, much of the underlying work is familiar.

What is the exposure? How material is it? Where does it sit inside the business? Who owns it? What indicators matter? What thresholds trigger escalation? What actions are available?

That is not exotic. That is risk management.

For much of my career, I worked at the most disorderly end of the geopolitical spectrum, protecting civilians from what Clausewitz famously described as politics by other means: war. That is geopolitics in its starkest form.

Armed conflict sits at one extreme: the far disorder end of global politics. What is changing now is that more of the pressure once associated mainly with the periphery of the international system is being transmitted toward its center, and with it into firms. The world economy is becoming more political as decades of free trade and globalization are partially reversed. States are intervening more directly in markets. Security logic is shaping trade, technology, energy, and investment policy.

That is why geopolitics has moved so quickly to the center of boardroom conversation. Boards ask about it. Executives mention it on earnings calls. Investors want to know whether companies have a view. Risk teams are told to account for it.

Some of that urgency is justified. We are living through a more contested international environment. The rules are less settled. The constraints are weaker. Great-power competition has sharpened. Industrial policy has returned. Interdependence is increasingly weaponized. Political shocks travel more rapidly through markets and supply chains than many firms are equipped to handle.

But to make geopolitical risk governable is not to minimize it. It is not to deny that geopolitics can be severe, discontinuous, or strategic. It is to stop treating geopolitics as something so unique that it cannot be brought within the discipline of the firm. It is to move from fascination to management.

This is where the ESG community, in particular, has something useful to contribute.

Whatever one thinks about the ESG label, the field helped many firms build capabilities that are directly relevant here: materiality assessment, cross-functional coordination, stakeholder mapping, regulatory scanning, supply chain scrutiny, board engagement, scenario work, and the translation of external pressures into internal processes. None of this is identical to geopolitics. But much of it is adjacent.

That matters because one of the strange features of the current moment is that companies are loudly acknowledging geopolitical instability while often lacking the internal mechanisms to process it. They consume briefings. They commission country notes. They run scenario exercises. They discuss developments in executive meetings. But many still do not have a repeatable way to determine which geopolitical issues are material, how they map to specific exposures, when they require escalation, and what decisions should follow.

Awareness is not capability.

That is why governance matters so much. Amid the noise of headlines, not everything matters equally.

Some geopolitical risks are systemic. Sustained increases in energy prices, for example, are felt across sectors. Others are highly specific: a product suddenly subject to export controls, a market closed by sanctions, a supplier disrupted by regulatory change, a technology stack exposed to investment restrictions or cyber pressure. There are also opportunities. Industrial policy is returning. Governments are prioritizing reindustrialization, strategic autonomy, and domestic capacity. Capital is being directed, incentives are being deployed, and markets are being reshaped.

The practical question is not whether geopolitics matters. It does.

The question is what matters, to whom, through which channels, and with what implications for decision-making.

AI sharpens this challenge. It lowers the cost of producing analysis, summaries, dashboards, alerts, and scenarios. That is valuable. But it does not remove the need for judgment. If anything, it heightens it. The risk is no longer a shortage of information. It is a surplus of plausible interpretation. If geopolitical risk is not tied to clear frameworks of materiality, exposure, and decision ownership, AI may simply accelerate the production of noise.

The question is no longer whether firms can access geopolitical insight. They can. The question is whether they can operationalize it.

Can they link geopolitical signals to actual exposures? Can they distinguish signal from noise? Can they identify which developments require escalation and which do not? Can they connect external developments to structured decisions on sourcing, investment, compliance, treasury, market entry, product strategy, security, or board oversight?

That is the real frontier.

And here the answer is not to build a wholly separate geopolitical priesthood inside the company, cut off from the rest of the business. Nor is it to force geopolitics into a generic risk register and declare the problem solved. Both approaches miss the point.

The better path is integration.

Start with the existing machinery of enterprise risk management, compliance, and strategy where it is useful. Use those structures to identify owners, assess materiality, map dependencies, define escalation triggers, and track actions. Then add what geopolitics specifically requires: sharper external monitoring, better scenario development, more explicit assumptions about state behavior, and a clearer grasp of how international political disorder reaches firm-specific exposures.

In many cases, firms do not need entirely new systems. Existing enterprise risk platforms already provide much of the workflow: identifying risks, assessing exposure, analyzing scenarios, assigning ownership, and tracking mitigations. What is often missing is a geopolitical layer.

That is a more manageable challenge than many assume.

It also suggests a more optimistic reading of the moment. Firms do not have to start from zero. Much of the architecture already exists. The task is to adapt it to a world in which geopolitics is no longer background context but an operating condition.

The firms that will handle this period best will not be those with the most dramatic rhetoric about global disorder. They will be the ones that make geopolitics legible inside the organization. They will identify the exposures that matter. They will assign ownership. They will build shared frameworks across functions. And they will translate external volatility into structured decisions rather than ambient anxiety.

Geopolitics is not going away. If anything, it is becoming more normal in business life.

That is precisely why it has to become governable.

Not sanitized. Not downgraded. Governable.

Made discussable. Made manageable. Made actionable.

That is when it stops being merely a hot topic in risk management and starts becoming a real management discipline.

No rule in American securities law says: “Disclose your geopolitical risk profile.”

There is no standardized template. No taxonomy. No score.

And yet, open a typical Fortune 500 10-K (the annual report that U.S. public companies are required to file with the U.S. Securities and Exchange Commission), and you will find pages of it.

Consider the language used by Apple Inc. in its Form 10-K for the fiscal year ended September 30, 2023:

“The Company’s business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health issues…”

“Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect the Company’s operations and supply chain and limit the Company’s ability to offer and distribute its products and services to customers.”

The language is there. The structure is there. The obligation, though unnamed, is real.

The mechanism: materiality does the work

The core of the American system sits with the U.S. Securities and Exchange Commission and its disclosure framework under Regulation S-K.

Two provisions matter:

– Item 105. Risk Factors

– Item 303. Management’s Discussion and Analysis (MD&A)

They do not mention geopolitics. They do not need to.

They require companies to disclose material risks and known trends and uncertainties.

As the U.S. Supreme Court held in TSC Industries, Inc. v. Northway, Inc., information is material if there is “a substantial likelihood that a reasonable shareholder would consider it important” in making a decision.

Materiality is deliberately broad. It evolves with the world.

The international system of states is persisting. The international order that underpinned globalization is not. Influential policymakers and analysts increasingly describe it as having fractured and now being reworked for a new era.

That shift matters for firms.

For three decades, globalization reduced friction. It lowered costs, widened markets, and allowed firms to optimize across borders with limited political interference.

That condition no longer holds.

Geopolitics now shapes:

– Where firms can produce

– Where they can sell

– Which technologies they can access

– Which capital they can raise

– Which partners they can work with

Decoupling between the United States and China is not theoretical. It is visible in export controls, investment screening, and technology denial regimes.

Friend-shoring is not a slogan. It is a reconfiguration of supply chains along political lines, often at higher cost and lower efficiency.

Sanctions are no longer episodic. They are a standing instrument of statecraft, capable of removing firms from markets overnight.

Industrial policy has returned at scale, directing capital toward strategic sectors and away from others.

Globalization has not ended. It has been politicized.

The effect is that geopolitical alignment now conditions commercial outcomes.

If geopolitics affects revenue, costs, operations, or strategy, and increasingly it does, it must be disclosed.

Not because it is geopolitical. Because it is material.

The ESG comparison: what a contested disclosure regime looks like

The contrast with ESG disclosure is instructive.

For more than a decade, regulators, investors, and standard-setters attempted to build an explicit framework for environmental, social, and governance disclosure in the United States. The SEC proposed mandatory climate disclosure rules in March 2022, finalized them in March 2024, and watched them challenged in court, stayed by the Eighth Circuit, and ultimately withdrawn in 2025 under a changed political environment.

The reason is structural. ESG disclosure became politically contested in a way that most disclosure categories do not. State attorneys general challenged the SEC’s authority. Legislation was introduced to restrict how asset managers could consider ESG factors. The acronym itself became a liability in certain political contexts.

Geopolitical disclosure has followed none of this path. There is no anti-geopolitics disclosure movement. The political valence of geopolitical risk is effectively neutral. It is understood across the political spectrum as a legitimate business concern, not an ideological imposition.

Three differences are worth noting. ESG has accumulated a dense framework infrastructure (TCFD, SASB, GRI, ISSB) that attempts comparability across firms; geopolitical disclosure has no equivalent, which limits comparability but also limits political exposure. ESG commitments create enforcement dynamics through greenwashing litigation and regulatory scrutiny; geopolitical disclosure operates more narrowly through materiality, requiring disclosure of what is material rather than commitment to a metric. And while ESG disclosure in the United States is, at least temporarily, in regulatory retreat, geopolitical disclosure is not: every escalation in trade policy, sanctions activity, or great-power competition expands the universe of developments firms must assess.

Firms that built ESG disclosure infrastructure in anticipation of mandatory rules now face an uncertain regulatory environment. Firms that have not built geopolitical disclosure infrastructure face a quieter but more durable obligation: one that does not require a rule to be enforced.

The content: geopolitics, named and unnamed

Read closely, and a pattern emerges across filings.

Companies describe:

– Sanctions exposure

– Supply chain concentration

– Export controls and technology restrictions

– Political and regulatory instability

– Energy and commodity dependencies

In some cases, this is explicitly framed as “geopolitical” risk. In others, the label is absent, but the substance is unmistakable.

The shift is not simply that firms use the word more often. They increasingly specify how political forces affect identifiable parts of the business.

As Jamie Dimon, Chairman and CEO of JPMorgan Chase, who leads the largest bank in the United States, wrote in his 2024 annual letter to shareholders:

“Our largest risk is geopolitical risk.”

JPMorgan sits at the center of global capital flows. When its chairman names geopolitical risk as the firm’s largest exposure, the scope of that judgment extends well beyond the firm’s own balance sheet.

How the de facto U.S. geopolitical risk exposure regime works: three mechanisms

Three features make the American approach unusually powerful and unusually durable compared to the contested ESG framework.

1. Litigation risk

The United States is a high liability environment. Generic risk factor disclosure is no longer defensible. The SEC’s amended rules explicitly discourage risks that could apply to any company and require disclosure tailored to the specific facts of the business. A company that describes geopolitical risk in boilerplate terms and then suffers a material loss from a geopolitical development, faces exposure. The plaintiff’s argument writes itself. Specificity is not a stylistic preference. It is liability management.

2. Market discipline

Institutional investors have become far more attentive to geopolitical exposure. As Larry Fink, Chairman and CEO of BlackRock, the world’s largest asset manager, wrote in his 2022 annual letter to shareholders:

“The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades.”

That reorientation flows directly into how investors read filings. Unlike ESG, where investor pressure has become politically contested, geopolitical risk assessment faces no equivalent political constraint. No state treasurer is instructing fund managers to ignore sanctions exposure or supply chain concentration in adversarial jurisdictions. Disclosure becomes not just compliance. It becomes an investor relations strategy.

3. Enforcement through materiality

The SEC does not need a geopolitical rule. Materiality is a flexible standard. It expands as risks become economically relevant. As geopolitical developments move from background conditions to direct drivers of performance, they are pulled into the scope of required disclosure. No new regulation is required. The existing framework does the work.

From disclosure to governance

Geopolitics has moved from context to constraint. It no longer sits outside the firm. It shapes the feasible set of strategic choices available to it.

– Market access can be withdrawn

– Supply chains can be rerouted

– Technologies can be restricted

– Capital can be politicized

These are not tail risks. They are embedded features of the operating environment.

And yet the system has a clear limitation. American companies disclose geopolitical risk. They do not systematically manage it. What you see in filings is often fragmented across functions, backwards-looking, and decision-light. Disclosure describes the landscape. Strategy requires choices within it.

There is rarely a unified geopolitical risk framework, clear thresholds and triggers, defined ownership at the executive level, or integration into capital allocation decisions. The result is a disclosure regime without a decision architecture.

This distinction matters. A company can accurately describe its exposure to China, outline the risks of sanctions, and note supply chain dependencies, and still be unprepared to act when conditions change.

Disclosure answers: what could happen.

Management capability answers: what will we do when it does.

Firms that stop at disclosure are still at the starting point.

The direction of travel

Three trends are likely to define the next phase of the American system.

1. From narrative to structure

Investors will push for comparable metrics, scenario-based disclosures, and more explicit exposure mapping. The pressure is already visible in how the most sophisticated institutional investors are engaging with risk committees. Narrative description is no longer sufficient. Structured, comparable data is the direction.

2. From risk to strategy

Geopolitics will increasingly be framed not only as downside risk, but as a determinant of competitive positioning, market access, and operating model design. Firms that treat geopolitical exposure only as something to disclose will find themselves behind firms that treat it as something to manage.

3. From implicit to explicit governance

As geopolitical forces shape revenue, costs, and strategic options, they can no longer sit outside formal governance structures. They require ownership, process, and board visibility. Firms that do not assign responsibility, define decision pathways, and elevate geopolitical exposure to the board level will struggle to act with speed and coherence when conditions shift.

The United States does not regulate geopolitical risk as a category.

It does something more flexible and more demanding.

It requires companies to disclose anything that matters.

And geopolitics now matters.

The result is a system in which firms are already reporting their geopolitical exposure, not because they are told to but because they cannot credibly do otherwise.

The disclosure is already there. The governance architecture, in most firms, is not. That is the gap worth closing.

In Thinking Historically: A Guide to Statecraft and Strategy, Francis J. Gavin offers a deceptively simple proposition: the past is not a repository of analogies, but a disciplined method for thinking about power, uncertainty, and decision-making. That proposition, properly understood, has direct implications far beyond foreign ministries and national security councils. It applies—urgently—to the modern firm.

Geopolitics is no longer an externality for business. It is a structural feature of the operating environment. Yet most firms still approach it episodically: as risk monitoring, compliance, or crisis response. What is missing is the translation of statecraft logic into enterprise decision architecture. In other words, firms need to think historically—and act strategically—about geopolitics.

This is not about turning CEOs into diplomats. It is about recognizing that the core problems of statecraft—uncertainty, power asymmetries, competing narratives, unintended consequences—are now embedded inside corporate decision-making.

Below is a practical synthesis: how the discipline of statecraft, as framed through historical thinking, maps directly onto enterprise geopolitics.

1. “How did we get here?” — Path dependence is a corporate variable

Statecraft begins with vertical history: understanding how a situation emerged over time. Firms rarely do this.

Most corporate geopolitical analysis starts with the present: a sanctions regime, a conflict, a regulatory shift. But exposure is not created in the moment—it is accumulated through past decisions: supplier selection, market entry, capital allocation, partnership structures.

A firm operating in Southeast Asia today is not simply “exposed to China risk.” It is exposed through a layered history of sourcing decisions, pricing strategies, and political assumptions made over years or decades.

Implication for enterprise geopolitics:

• Exposure mapping must be historical, not static.

• Decision-makers need to understand how dependencies were built, not just where they exist.

• Path dependence constrains optionality. If you don’t see it, you overestimate your flexibility.

2. “What else is happening?” — Horizontal context is where risk actually sits

Policymakers are trained to situate events within a broader system. Firms, by contrast, tend to isolate variables: “China tariffs,” “Ukraine war,” “Middle East instability.”

But geopolitical shocks are rarely discrete. They are system-level interactions.

A regulatory action in Brussels may be tied to industrial policy competition with Washington. A shipping disruption in the Red Sea may intersect with energy pricing, insurance markets, and domestic political cycles in multiple countries.

Implication:

• Firms must move from issue-based tracking to system mapping.

• Geopolitical signals should be interpreted relationally, not individually.

• The value is not in more data, but in better contextualization.

This is where most AI-enabled monitoring fails: it scales signal ingestion without solving the interpretive problem.

3. “What is unsaid?” — Assumptions are the real risk surface

Statecraft forces attention to implicit assumptions—what actors believe but do not articulate.

In enterprise settings, these assumptions are often embedded in strategy:

• “Globalization will continue, albeit with friction.”

• “Regulation will remain predictable.”

• “Markets will remain accessible.”

These are not facts. They are operating assumptions—often untested.

Implication:

• Enterprise geopolitics must surface and stress-test implicit assumptions.

• Scenario analysis should focus less on “what might happen” and more on “what must be true for our strategy to hold.”

• Boards should explicitly review geopolitical assumptions alongside financial ones.

This is where historical thinking adds discipline: it reveals how often similar assumptions have failed in the past.

4. “How are things trending?” — Time matters more than events

One of Gavin’s key insights is that timing—lags, sequences, and pacing—shapes outcomes as much as events themselves.

Firms tend to react to discrete triggers: sanctions announcements, election results, conflict outbreaks. But the strategic reality is often determined by slower-moving trends:

• Gradual decoupling of supply chains

• Incremental regulatory divergence

• Shifting alliance structures

Implication:

• Firms need to track trajectories, not just events.

• Early signals matter more than confirmed disruptions.

• Decision advantage comes from acting on trends before they crystallize into shocks.

This requires institutionalizing “weak signal” detection and linking it to decision thresholds.

5. “How is this understood by others?” — Perception is a strategic variable

Statecraft is fundamentally about interaction under uncertainty. What matters is not just what is happening, but how actors interpret it.

Firms often ignore this.

A company may view itself as apolitical, but host governments, regulators, or competitors may not. A supply chain decision may be interpreted as alignment with one bloc over another. A technology deployment may trigger security concerns.

Implication:

• Firms must assess how their actions are perceived across jurisdictions.

• Geopolitical exposure includes reputational and narrative dimensions, not just legal or operational ones.

• Strategic ambiguity can be an asset—but only if managed deliberately.

This is particularly acute in a fragmenting international order, where competing narratives are part of the operating environment.

6. “Why does this matter?” — Proportionality is a leadership discipline

One of the most common failures in both statecraft and business is misjudging significance—overreacting to noise or underreacting to structural change.

Geopolitics amplifies this problem because it is inherently salient. Everything feels important.

Implication:

• Firms need a framework for proportionality.

• Not all geopolitical developments warrant strategic response.

• The key is distinguishing between signal, noise, and structural shift.

This is where governance becomes critical: who decides what matters, and based on what criteria?

7. “What are the unintended consequences?” — Second-order effects are the real game

Statecraft is obsessed with unintended consequences. Business is not.

A firm exits a market to reduce risk—only to lose strategic position. It diversifies suppliers—only to increase cost and complexity. It complies with one regime—only to create exposure in another.

Implication:

• Every geopolitical response must be evaluated for second- and third-order effects.

• Trade-offs should be explicit, not implicit.

• Decision-making should incorporate counterfactuals: “What new risks does this action create?”

This is where most corporate geopolitical strategies fail—they optimize for immediate risk reduction without considering systemic impact.

8. “Was this inevitable?” — Avoid deterministic thinking

In hindsight, geopolitical developments often appear inevitable. They were not.

Deterministic narratives—“decoupling was bound to happen,” “conflict was unavoidable”—flatten complexity and obscure alternative paths.

For firms, this creates a dangerous bias: it normalizes outcomes and reduces accountability for missed signals or poor decisions.

Implication:

• Enterprise geopolitics must resist hindsight bias.

• Scenario planning should preserve contingency, not collapse it into inevitability.

• Learning processes should focus on decision quality, not outcome alignment.

9. “Are things changing rapidly?” — Recognize punctuated shifts

History is not linear. Periods of stability are punctuated by rapid change.

The current geopolitical environment is increasingly characterized by such punctuations: sudden sanctions regimes, rapid regulatory shifts, abrupt conflict escalations.

Implication:

• Firms must build for discontinuity, not just volatility.

• Decision architectures should include escalation protocols and rapid-response mechanisms.

• Resilience is not just redundancy—it is the ability to act under compressed timelines.

10. “Are we using history correctly?” — Avoid bad analogies

One of the most persistent failures in both policy and business is the misuse of historical analogy.

“Is this another Cold War?” “Is this like 2008?” These analogies are often seductive—and misleading.

Implication:

• Historical thinking should be analytical, not analogical.

• The goal is to extract patterns and mechanisms, not to find superficial similarities.

• Firms should invest in structured historical analysis, not narrative shortcuts.

11. “Is this unprecedented?” — Beware both novelty and complacency

Declaring something “unprecedented” can justify inaction (“we couldn’t have known”) or overreaction (“this changes everything”).

In reality, most developments are mixtures of continuity and change.

Implication:

• Enterprise geopolitics should assess both what is new and what is familiar.

• This enables calibrated responses rather than binary ones.

• It also prevents strategic paralysis in the face of novelty.

12. “What does it mean?” — Strategy is interpretation

Ultimately, statecraft is about meaning: translating complex realities into actionable strategy.

This is where most firms fall short. They collect data, monitor risks, and produce reports—but fail to connect analysis to decision.

Implication:

• Geopolitical analysis must culminate in decision-ready outputs.

• This requires clear articulation of options, trade-offs, and timing.

• It also requires ownership: who is accountable for acting on geopolitical insight?

From Statecraft to Enterprise Function

The lesson is straightforward: geopolitics is no longer a peripheral concern. It is a core management function.

But importing geopolitics into the enterprise is not enough. It must be structured.

Firms need:

• Signal ingestion that prioritizes relevance over volume

• Exposure mapping that reflects real operational dependencies

• Scenario engines grounded in causal logic, not speculation

• Decision triggers that link signals to action

• Executive outputs framed in business terms

• Governance records that create accountability

In other words, they need a decision architecture.

This is the corporate analogue of statecraft: a system that translates external complexity into internal action.

The Strategic Imperative

The fragmentation of the international order is not a temporary disruption. It is a structural condition.

In such an environment, firms face a choice:

• Treat geopolitics as a series of external shocks to be managed reactively

• Or internalize it as a governed function, embedded in strategy and decision-making

The first approach is familiar—and increasingly inadequate. The second requires a shift in mindset.

It requires firms to think like practitioners of statecraft:

• Historically informed

• Systemically aware

• Assumption-driven

• Strategically disciplined

This is not an academic exercise. It is a competitive necessity.

Because in a world where geopolitics shapes markets, supply chains, and capital flows, the firms that understand and operationalize it will not just manage risk—they will create advantage.

And that, ultimately, is what statecraft has always been about.

A new study published in the Harvard Business Review last week reminds us that large language models (LLMs) need to be paired with human judgment, especially in a field as hard to quantify as geopolitics.

Business school researchers tested seven leading large language models — including ChatGPT, Claude, Gemini, Grok, and DeepSeek — across seven core strategic tensions that required binary choices. The finding was consistent across all models: LLMs systematically recommend the same buzzword-aligned strategies regardless of business context.

The researchers call this “trendslop”: AI’s structural bias toward whatever sounds most current and defensible — differentiation over cost leadership, augmentation over automation, long-term thinking over short-term urgency — independent of what the specific situation requires.

The scale of the evidence is significant. Over 15,000 trials were run to determine whether better prompting could correct the bias. It could not: the strongest biases shifted less than 2%. Providing richer organizational context moved responses by only 11% on average.

The researchers also documented the “hybrid trap.” When not forced to choose, LLMs recommended pursuing contradictory strategies simultaneously, producing the appearance of analytical completeness while resolving nothing.

The study was designed around generic corporate strategy questions. The implications for AI-assisted geopolitical analysis are more serious still.

Why Geopolitics Is a Harder Case

Trendslop in corporate strategy produces suboptimal advice. A model that consistently recommends differentiation over cost leadership when cost leadership is correct wastes time and introduces drift.

Trendslop in geopolitical analysis can produce unrecognized exposure.

Geopolitical analysis is not generic by definition. It is inherently firm-specific, jurisdiction-specific, and time-horizon-specific. The material questions are not whether market fragmentation is accelerating in general, but whether it is accelerating in the specific configurations on which a particular firm depends.

An LLM trained on the accumulated discourse and commentary on international relations will have absorbed a set of consensus positions: the received wisdom on which risks are salient, which actors matter, and which scenarios are credible. It will reproduce those tendencies with confidence and structural coherence. The output will read as rigorous. It will not be firm-specific.

The hybrid trap compounds this. A model asked whether a firm should reduce China exposure or maintain it will, unless constrained, recommend doing both, presented as “de-risking while preserving optionality.” That is not a geopolitical judgment. It is a hedge dressed as analysis.

The same structural feature that makes LLMs unreliable strategic advisors for generic questions makes them actively misleading for geopolitical ones: they smooth the tensions that the analysis is supposed to resolve.

The Prior Question

Before asking what AI can contribute to geopolitical analysis, firms need to answer a more fundamental question: what is the business case for paying attention to geopolitics in the first place?

Geopolitical attention is not uniformly distributed across industries, geographies, or business models. A firm with concentrated revenue in a single domestic market, a domestically sourced supply chain, and no cross-border regulatory exposure faces a fundamentally different calculus than a firm whose operations span multiple jurisdictions, whose capital is denominated across currencies, and whose regulatory licenses are subject to extraterritorial reach.

The business case for geopolitical analysis is a function of exposure. That exposure must be mapped before analysis begins. Without it, the firm has no basis for evaluating which geopolitical developments are material and which are background noise.

This is the step AI-assisted analysis almost always skips. A model asked about, say, U.S.-China trade policy will generate a technically competent overview of tariff structures, export controls, and bilateral tensions. It will not tell the firm whether any of this is existential to its business, consequential but manageable, or essentially irrelevant to its specific configuration.

Only the firm can answer that. And the answer requires structured self-knowledge that many firms do not yet have: a mapped, maintained representation of their own geopolitical exposure across asset geography, supply-chain structure, regulatory architecture, capital denomination, and institutional relationships.

Without that foundation, AI-generated geopolitical analysis is trendslop applied to the wrong question.

The Human in the Loop

The HBR researchers’ prescription is precise: use LLMs to generate alternatives and stress-test assumptions, not to make choices. Actively prompt for opposing strategies to surface biases. Treat hybrid recommendations as a warning sign, not sophisticated thinking.

Applied to geopolitical analysis, this prescription has a specific institutional form.

The human in the loop is not a reviewer who checks AI outputs for factual errors. That function addresses the wrong failure mode. The problem is not that AI gets facts wrong. It is that AI gets the framing right and the judgment wrong.

The human function is threefold.

First, anchoring the analysis in the business. This means establishing, before any AI tool is engaged, which geopolitical configurations are material to the firm’s revenue, operations, and governance. This usually cannot be extracted from a strategy document, which is often written as a public-facing document. It requires structured elicitation from operational, legal, financial, and strategy leadership, surfacing the tacit and latent knowledge about how the firm actually works that no model can retrieve.

Second, forming and holding a conviction. Trendslop is, at its core, the absence of a committed analytical position. A model that recommends differentiation and cost leadership simultaneously has not taken a view. The human function is to take one, provisionally, revisably, but specifically. That conviction then becomes the input that directs AI-generated analysis rather than outsources it.

Third, forcing contact with reality. AI is most useful once a firm-specific conviction is in place: extending it across scenarios, tracing second-order effects, and identifying indicators that would confirm or contradict it. This is compute applied to a judgment already formed. It is not a substitute for forming that judgment.

The 11% finding from the HBR research is instructive here. Even with detailed organizational context, AI-generated analysis retained 89% of its trendslop bias. That residual is not a prompting failure. It is an architectural constraint. The model does not know what is existential to the business because that knowledge is not in the training data. It lives in the firm, in what is written in non-public documents and in the unwritten knowledge, aptitudes and practices of corporate decision-makers.

What This Produces

A firm that approaches AI-assisted geopolitical analysis this way — starting from mapped exposure, holding a working conviction, using AI to stress-test rather than originate — gets outputs that are qualitatively different from trendslop.

Instead of a balanced overview of geopolitical tensions, it gets a scenario-tested assessment of which of those tensions intersect with its specific exposure vectors.

Instead of a hybrid recommendation to both maintain and reduce presence in a given jurisdiction, it gets a structured stress-test of what maintaining that presence costs under different policy trajectories.

Instead of analysis calibrated to what sounds defensible, it gets analysis calibrated to what requires a decision.

Five recurring applications illustrate the difference:

1. Conditional market access. For firms exposed to China, what happens if regulatory approval or licensing becomes contingent on political alignment? For operations tied to the United States, how do outbound investment screening and export control expansions affect what can be sold, financed, or transferred? This determines which revenues are durable and where compliance becomes a geopolitical variable.

2. Instrumental interdependence. Which dependencies that appear efficient are no longer resilient? The disruption of Russian gas flows to Germany’s industrial base is the reference case. The question for any firm: where does your supply chain have a similar structure, and what is the unwind cost?

3. Regulatory sovereignty. How do data localization rules, export restrictions, and resource nationalism reshape operating models in specific jurisdictions? The question is not whether these trends are real. It is whether the firm’s business model aligns with state priorities in the markets where it operates.

4. Alignment over rules. Compliance is necessary but not sufficient. How does regulatory treatment vary within the EU depending on political positioning? Positioning matters independently of formal compliance.

5. Capital as leverage. How do U.S. financial controls affect access to dollar systems? How are hubs like the UAE positioning as alternative conduits? Where is the firm’s capital configuration exposed to state-directed restriction?

Gradual. Then All at Once.

Geopolitical systems are brittle.

They absorb pressure: incremental restrictions, localized disruptions, partial decoupling. Then thresholds are crossed and behavior changes more abruptly.

For firms, this is when exposure crystallizes: market access becomes conditional, supply chains must be redesigned, and capital flows are constrained.

Analysis anchored in continuity — which is precisely what trendslop produces — misses this transition. Not because the signals are absent. Because the framework assumes stability.

A firm operating from trendslop-derived geopolitical analysis is, structurally, a firm reading yesterday’s consensus into tomorrow’s decisions. The analytical product looks current. The underlying orientation is retrospective.

The Edge

The HBR study defines the mechanism of AI-generated analytical failure with precision: models produce what sounds most current and defensible, not what is most decision-relevant.

For geopolitical analysis, this is the difference between a firm that understands its exposure and one that has a well-formatted description of the world. This is the difference between making risk-based decisions and admiring the problems in world politics.

The differentiator is not access to better AI tools. It is the institutional capacity to use those tools correctly: starting from a mapped understanding of the firm’s own geopolitical exposure, forming a working conviction about the configurations that matter, and deploying AI to test and extend that conviction rather than generate it.

Firms that build this capacity will make better decisions than those substituting the tool for judgment. In a system where structural change accumulates quietly and then manifests abruptly, that difference compounds.

Romasanta, A., Thomas, L.D.W., & Levina, N. (2026). “Researchers Asked LLMs for Strategic Advice. They Got ‘Trendslop’ in Return.” Harvard Business Review, March 16, 2026.

A Discipline Without a Name

The concept of “geopolitical risk” has become standard vocabulary in annual reports, earnings calls, and board presentations. The terminology is now routine. The institutional architecture to support it is not.

Across a growing number of globally exposed firms, geopolitics is being integrated into decision-making processes in ways that look less like advisory and more like governance. Risk committees receive structured briefings. Strategy teams incorporate scenario planning tied to state-level developments. Supply chain functions map exposure to sanctions regimes and export control frameworks. In some organizations, dedicated geopolitics units report directly to the CEO or board.

This is not political risk consulting. It is not a subscription intelligence service. It is something structurally different — and it does not yet have a name.

The appropriate term is Enterprise Geopolitics.

Defining the Term

Enterprise Geopolitics is the systematic integration of geopolitical analysis into corporate governance, capital allocation, and strategic decision-making.

It treats geopolitical risk not as background context or episodic advisory input, but as a structural variable requiring dedicated institutional architecture — defined processes, assigned accountability, and repeatable decision frameworks embedded within the organization.

The discipline distinguishes between two distinct capabilities:

– Geopolitical awareness — knowing what is happening in the external environment

– Geopolitical governance — knowing what to do, when, at which level of the organization, and through which decision mechanism

Most organizations have developed some degree of the first. Few have built the second.

Enterprise Geopolitics is defined by governance, not analysis. The analytical function — signal collection, scenario construction, exposure assessment — is necessary but not sufficient. The discipline becomes enterprise-relevant only when it connects to decision authority, capital allocation, and board-level accountability.

What It Is Not

Precision requires exclusion.

Political risk analysis is advisory and episodic. It produces assessments of country-level instability, regulatory change, or regime behavior, typically delivered as reports or briefings. It is valuable. It does not, by itself, constitute a governance function. Political risk analysis tells the organization what is happening. It does not determine what the organization does in response.

Geopolitical intelligence services aggregate and deliver signals — news monitoring, event tracking, expert commentary, thematic research. These are inputs. They are not decision frameworks. A firm that subscribes to ten intelligence services but has no defined process for converting that information into governance action has not built Enterprise Geopolitics. It has built a reading list.

Country risk is a credit and investment category. It measures default probability, currency stability, and political continuity as they affect asset valuation. It is narrow by design. Enterprise Geopolitics is concerned with the full range of exposure channels — trade, regulatory, supply chain, capital, legal, reputational — across time horizons that extend beyond credit cycles.

Government affairs and public policy functions manage relationships with regulators and legislators in specific jurisdictions. They operate with specific mandates and limited aperture. Enterprise Geopolitics requires cross-jurisdictional synthesis and integration with strategic planning, which falls outside their typical scope.

None of these functions are replacements. Each addresses part of the problem. Enterprise Geopolitics is the architecture that holds them together — and connects them to governance.

The Governance Gap

The World Economic Forum, McKinsey, BCG, and Global Trade Alert have each published substantial analysis in the past eighteen months on how global firms are institutionalizing geopolitical capability. The consistency of the findings is notable.

Most firms have increased their geopolitical awareness. Most are still translating that awareness into action through informal, fragmented, or person-dependent channels. The challenge is not analytical. It is structural.

Several patterns characterize the governance gap:

– Key person risk. Geopolitical awareness concentrates in one or two individuals — often a former diplomat, intelligence official, or senior strategist embedded in the C-suite. When those individuals leave, institutional capability departs with them.

– Disconnected functions. Risk, strategy, legal, supply chain, and communications each engage geopolitics within their own scope. Integration at the enterprise level rarely occurs systematically. The CEO and board absorb this integration burden informally.

– Qualitative reporting without decision triggers. Most organizations receive narrative summaries of geopolitical developments. Few have defined thresholds that require a specific governance response — escalation to the board, convening of a risk committee, adjustment of capital allocation guidance.

– Reactive posture by default. Without defined process, geopolitical inputs reach the organization through the news cycle. The operational response follows the event. Structural risk — the kind that builds over years before crystallizing — is systematically underweighted.

These are not analytical failures. They are governance failures. The analytical capacity may be adequate. The institutional architecture to act on it is absent.

The Institutional Requirement

Building Enterprise Geopolitics requires decisions across four dimensions.

– Mandate. Geopolitical risk must be formally assigned as a governance responsibility — with defined accountability at the board or C-suite level, a clear scope, and authority that extends beyond crisis response. Without a mandate, the function defaults to advisory and loses institutional standing when it matters most.

– Exposure architecture. The organization must map its geopolitical exposure across material dimensions — trade dependencies, regulatory jurisdictions, capital sources, supply chain nodes, legal frameworks — and maintain that map as a live instrument, not a periodic report. Materiality must be defined. Not all geopolitical developments are enterprise-relevant. The framework must distinguish structural risk from event noise.

– Decision integration. Geopolitical inputs must connect to specific decision moments: capital allocation cycles, strategic planning processes, M&A screening, board risk reviews. The connection must be systematic, not opportunistic. Governance value is generated at the intersection of geopolitical analysis and organizational decision authority — not in the analysis itself.

– Institutional continuity. The function must be designed to survive personnel change. This requires documented frameworks, embedded processes across functions, and governance routines that do not depend on individual expertise. A geopolitics unit that operates as an extension of one senior executive is a capability risk, not a governance asset.

The Position

Enterprise Geopolitics is not a new idea. It is a newly necessary discipline given an institutional name.

The conditions that made episodic political risk management adequate — relative predictability of the liberal trade order, stable regulatory jurisdictions, US dollar dominance, technology decoupling as a hypothetical — have materially changed. The structural shifts underway are not cyclical. Multipolarity, great-power competition, industrial policy expansion, sanctions as a primary foreign policy instrument, and technology fragmentation are reshaping the operating environment on a timeline that extends well beyond quarterly planning horizons.

Organizations that treat these developments as background noise will manage them reactively. Organizations that build Enterprise Geopolitics as a governance function will manage them structurally — with defined processes, institutional accountability, and decision frameworks that operate before the crisis arrives.

The discipline exists. The term is now available.

The Chief Geopolitical Officer practice embeds Enterprise Geopolitics within executive teams — building the governance architecture, decision frameworks, and institutional capability that geopolitically exposed firms require.

Carl von Clausewitz fought in the Napoleonic Wars and spent the remainder of his life trying to understand what he had witnessed. On War, published posthumously in 1832, remains the foundational text of Western strategic thought. He wrote about the irreducible complexity of conflict — the fog, the friction, the limits of intelligence, the primacy of politics over military logic. His central argument was that no plan survives contact with reality intact, and that the purpose of theory is not to eliminate uncertainty but to train the mind to act within it.

Two centuries later, his observation about knowledge and uncertainty has acquired a new register. The volume of geopolitical noise reaching national leaders and corporate decision-makers alike has never been greater. The analytical challenge for company executives — discerning the signal in that noise that represents firm-specific exposure, in real time, at decision-relevant resolution — has never been harder.

Many executives are experimenting with tools such as ChatGPT and Claude to help parse signal from noise. That instinct is sound.

But the real potential for AI to improve geopolitical decision-making inside firms lies elsewhere: in the emerging practice of building corporate digital twins that represent a company’s actual exposure to the geopolitical system.

These systems are not designed to replace human judgment. Their purpose is simpler. They help organizations structure an internal conversation about two questions:

• what they believe about the world

• how they believe they are positioned within it

AI will not eliminate geopolitical uncertainty.
What it can do is help firms reason about their exposure to that uncertainty more systematically.

Modeling Geopolitics with AI

Recent advances in artificial intelligence — particularly the emergence of agentic systems — make it possible to approach this problem in a more structured way.

Earlier large language models responded to individual prompts. Agentic architectures extend that capability. They can pursue defined analytical tasks over time: gathering information, updating their internal understanding as conditions change, and using tools to reason through problems.

Applied to geopolitics, this creates the possibility of maintaining a continuously updated representation of two things simultaneously:

• the geopolitical environment itself

• the specific ways a firm is exposed to it

The objective is not prediction in the narrow sense. It is to give organizations a disciplined way to explore how geopolitical developments could interact with their own strategy and operations.

In practice, this requires building two complementary models.

The first represents the external geopolitical environment.
The second represents the firm itself.

These are commonly described as a world model and a corporate digital twin.

When the two are connected, organizations can begin to test how geopolitical developments might propagate through their own operational architecture.

How the System Works

At a high level, the architecture has three components.

1. A World Model
A continuously updated representation of the geopolitical environment — states, alliances, competitors, suppliers, sanctions regimes, regulatory structures, and conflict dynamics.

2. A Corporate Digital Twin
A structured model of the firm itself — its assets, supply chains, regulatory exposure, financial dependencies, and government relationships.

3. A Simulation Layer
A system that allows the two models to interact, so geopolitical developments can be tested against the firm’s operating architecture.

In effect, the system asks a structured question:

If the geopolitical environment changes in a particular way, how does that change propagate through the firm?

The answer is not a generic risk score. It is a firm-specific assessment of operational exposure.

The World Model

The first component is a structured model of the geopolitical environment.

This is not a news feed. It is a continuously updated representation of the relationships that shape international political and economic behavior: relations among states, alliances, competitors, suppliers, sanctions regimes, regulatory jurisdictions, trade dependencies, and conflict dynamics.

The model draws on data sources that already exist but are difficult for any human team to track simultaneously. These include diplomatic statements, sanctions notices, legislative actions, trade flows, financial data, conflict event records, and regulatory announcements.

Rather than presenting this information as commentary, the model organizes it analytically.

It tracks relationships among actors and identifies patterns indicating where policy pressure is building, where regulatory divergence is emerging, or where geopolitical tensions may be escalating.

The result is a structured picture of how the geopolitical system is evolving across domains such as trade policy, sanctions regimes, technology controls, and security competition.

This is the external half of the architecture.

The Corporate Digital Twin

The second component is a model of the firm itself.

Every globally exposed company operates through a complex architecture of geopolitical exposure. Production assets sit in specific jurisdictions. Supply chains depend on networks of suppliers across multiple tiers. Revenues are generated in different markets. Capital is raised in particular financial systems. Regulatory approvals are held in specific jurisdictions.

Much of this information already exists inside the organization. What is usually missing is a way to assemble it into a single analytical picture.

The corporate digital twin does exactly that.

It organizes the firm’s exposure across several dimensions:

• geographic distribution of assets and facilities

• supplier networks and supply chain concentration

• regulatory exposure across jurisdictions

• financial exposure across markets and currencies

• relationships with governments and regulators

The result is not an industry benchmark. It is a firm-specific map of how the organization interacts with the geopolitical system.

As conditions change — new suppliers, new markets, regulatory shifts — the twin can be updated to reflect the firm’s evolving configuration.

The Simulation Layer

Once both models exist, they can be used together.

This allows organizations to examine how specific geopolitical developments might affect their operations.

A scenario might examine:

• sanctions escalation against a jurisdiction

• disruption of a major shipping corridor

• regulatory divergence affecting a critical technology input

The scenario is first applied to the world model, representing how the geopolitical environment might respond. The resulting changes are then mapped onto the corporate digital twin to assess how the firm’s assets, supply chains, and regulatory exposures could be affected.

The output is not a generic risk score.

It is a structured assessment of how a geopolitical development could propagate through the firm’s operations.

The breakthrough is not AI analysis of geopolitics.
It is the ability to connect geopolitical developments directly to the operating architecture of a specific firm.

The Human Layer

Even in this architecture, human judgment remains essential.

Some of the most important information about a firm’s geopolitical exposure does not exist in any dataset. It resides in the experience of executives and operators: informal supplier relationships, regulatory sensitivities, political dynamics in key jurisdictions, and institutional memory about past crises.

Capturing this knowledge requires structured engagement with the organization.

This is the role of the Deployment Strategist, a function well-suited for a Chief Geopolitical Officer.

That role involves translating geopolitical developments into firm-relevant exposure assessments, integrating internal knowledge into the digital twin, and communicating analytical results to executives and boards in decision-relevant terms.

AI provides scale — the ability to ingest and structure vast quantities of geopolitical information.

What it cannot provide is institutional judgment: the understanding of how geopolitical developments intersect with a firm’s strategy, assets, relationships, and governance obligations.

In practice, that responsibility requires a function capable of translating geopolitical dynamics into decisions the firm can act on — and stand behind.

Subscribe now

In January 2026, Canadian Prime Minister Mark Carney addressed the World Economic Forum in Davos and offered a stark diagnosis: that the post–World War II international order—the rules, institutions, and shared expectations that structured state behavior—has ruptured. Carney’s insistence on “rupture,” rather than transition, functions as political framing—meant to rally Canadians, stiffen resolve, and signal that hard trade-offs lie ahead as Washington increasingly approaches economic policy in zero-sum terms. It also sets the stage for diplomacy aimed at widening Canada’s room for maneuver, including Carney’s subsequent travel to China and India to explore rapprochement and risk-reducing diversification away from the United States. In that sense, the Davos remarks are international statecraft: they signal to states and markets how Ottawa intends to navigate an international system that endures even as the global order fragments in ways not seen since the end of World War II.

The CEOs of globally prominent firms, rubbing shoulders with Carney and other political and business leaders, are themselves products of an international order now under strain. Their companies scaled in the late-twentieth-century wave of economic globalization that liberalized trade and capital flows, integrated supply chains across borders, and gave corporations a degree of autonomy from the state that would have seemed unusual in earlier eras.

Take Citigroup as an example. The bank today operates in roughly 95 countries and serves clients in about 180, including China while having only recently exited Russia after the Ukraine war. In 1991, by contrast, the institution then known as Citicorp operated in just over 90 countries, a reflection of how the late twentieth century era of economic globalization expanded the reach of major firms. Speaking at the same Davos meeting as Carney, Citi’s chief executive Jane Fraser acknowledged the changing international environment, warning that “geopolitics is going to be the biggest shift in the world of finance.” Concerns about the consequences for global commerce echoed beyond finance. Vincent Clerc, the CEO of the Danish shipping giant Maersk, observed that “we are operating in a world that is becoming more fragmented and more volatile,” a reality already visible in the disruptions and rerouting of global supply chains.

Enterprise Geopolitics Is Not Just for Global Giants

The instinct is to frame geopolitical risk as the concern of firms like Citi or Maersk—corporations operating across dozens of jurisdictions with the scale and resources to maintain dedicated country risk teams. That framing is now obsolete.

Enterprise geopolitics applies to any firm that is globally exposed, not only to those that are globally prominent. A mid-tier manufacturer sourcing components across three Asian jurisdictions, a professional services firm billing clients in multiple currencies under different regulatory regimes, a technology company whose cloud infrastructure crosses data-sovereignty borders—each of these organizations is already operating inside the fragmentation Carney described. Most have no systematic process for managing it.

The consequences of political decisions now directly determine which markets are accessible, which capital sources are available, which technologies can be deployed, and which supply chain configurations are legally permissible. These are primary strategic variables, not background conditions. And they apply at scale to the mid-tier in ways that were not true a decade ago, when the underlying order still provided a degree of predictability that absorbed much of the risk.

At the same time, the informational environment has become saturated. Political developments appear continuously across financial media, social media, and internal risk reporting systems. Leadership teams face not only genuine geopolitical exposure but a constant flow of commentary, speculation, and headline-driven noise that makes it harder, not easier, to act with precision.

The CEO’s mandate is not to monitor geopolitics. It is to distinguish between developments that materially affect the firm’s exposure and those that do not—and to build the decision architecture that acts on that distinction. That task now sits squarely at the executive level, across a far wider range of firms than conventional thinking assumes.

The Function Behind the Mandate

The geopolitical signal has to be monitored, filtered, and translated before it reaches the executive layer. Exposure baselines have to be built and maintained. Scenario structures have to be stress-tested. Board materials have to be prepared to governance standards.

In other words, the organization needs a capability that converts geopolitical information into structured executive insight.

This is the role of the Chief Geopolitical Officer. The CGO provides the analytical infrastructure that allows leadership to distinguish between material geopolitical risks and opportunities and the background noise that appears daily across news feeds and market commentary. The function maps state interests across jurisdictions, tracks policy instruments and regulatory trajectories, and translates geopolitical developments into exposure diagnostics that connect directly to capital allocation, supply chain architecture, legal risk, and market positioning. Without this function, the CEO’s geopolitical mandate has no analytical backbone.

The CGO is not a government affairs function. It is not an external advisor retained for occasional commentary. It is an embedded analytical and decision-support capability, operating at the intersection of geopolitical intelligence and enterprise governance, producing structured output on the cadence the current environment demands.

That output is structured to move. From exposure identification, through signal filtering and scenario development, to cross-functional ownership and governance integration — the CGO function is designed around a single endpoint: a decision the CEO can make and stand behind. Not a risk register. Not a watch list. A decision, with defined options, documented rationale, and clear accountability.

Through my work as a Fractional Chief Geopolitical Officer, I help companies build that capability—conducting Geopolitical Management & Resilience Assessments to benchmark governance and leadership decision-making; mapping portfolio, asset, and transaction exposure to identify material geopolitical risks and opportunities; designing geopolitical PMO structures that bring discipline to risk management and mitigation initiatives; developing scenario analysis and stress-testing frameworks—including those supported by large language models and other decision tools—to expand strategic optionality; and advising leadership and boards during crises, sanctions shifts, regulatory shocks, and conflict-driven disruptions. If these questions are beginning to surface inside your organization, I would welcome the opportunity to discuss how this capability can be established or strengthened.

Subscribe now

Patrick Fruchet provides Fractional Chief Geopolitical Officer services to executive teams and institutional investors. | cgo@fruchet.com | +1 646 830-0450 |

For three decades, globally exposed companies operated in an environment that felt increasingly stable. Trade expanded. Capital flowed. Supply chains stretched across continents. Regulatory regimes, though varied, operated within a broadly shared framework.

That stability was not accidental. It rested on structural conditions.

Those conditions are shifting.

Enterprise geopolitics begins with understanding two realities that shape the operating environment more profoundly than any single election, sanctions package, or geopolitical crisis.

Structural Reality #1: There Is No Authority Above States

The defining feature of international politics is not cooperation, conflict, or trade. It is the absence of a central authority. There is no government above governments. No regulator that can compel compliance across all jurisdictions. No court whose writ runs universally.

States operate in an anarchical system. Sovereigns are formally equal — territorially bounded, legally independent, recognized as such by others — but materially unequal in power, capacity, and reach. The United States and Luxembourg possess the same legal standing. They do not possess the same leverage.

Order, when it exists, is contingent. It is constructed through power, sustained through alignment of interests, and reinforced through institutions — but it is never guaranteed. Treaties, trade regimes, and financial frameworks function only insofar as the major powers that underpin them continue to support and enforce them.

For several decades, many firms behaved as though the rules of global commerce were self-executing. They were not. They were political commitments embedded in an anarchical system stabilized by power.

Enterprise geopolitics begins by treating sovereign power as a permanent feature of the environment. Cross-border exposure ultimately rests on state discretion. Market access, capital mobility, sanctions enforcement, and

technology controls — all sit within political authority structures that can shift without appeal.

The question is not whether the system is anarchical. It is whether the firm is designed with that in mind.

Structural Reality #2: Hegemony Stabilizes the System — Until It Doesn’t

Anarchy does not automatically produce disorder. Stability can emerge when one state accumulates sufficient economic scale, military reach, financial centrality, and institutional influence to shape and underwrite the rules of the system.

After 1945, the United States assumed that role. The Bretton Woods institutions anchored monetary stability. The dollar became the central reserve and transaction currency. U.S. naval dominance secured trade routes. Multilateral trade institutions expanded under American sponsorship. The architecture of global commerce was not neutral; it was underwritten.

During the Cold War, the system was bipolar. The United States and the Soviet Union competed militarily and ideologically, but the Western economic sphere operated under American predominance. Within that sphere, trade and capital integration deepened under security guarantees and institutional continuity. The bipolar structure constrained escalation and created a predictable — if tense — geopolitical equilibrium.

When the Soviet Union collapsed, that bipolar constraint disappeared. The United States entered a period of unambiguous primacy. For roughly three decades, the international system functioned under what might be described as permissive unipolarity. Institutions expanded. Interdependence deepened. Market integration accelerated. Supply chains optimized for efficiency rather than resilience.

This period shaped corporate assumptions. Convergence was expected. Regulatory harmonization appeared likely. Political risk seemed manageable within a broadly stable order.

Hegemony, however, is not permanent. Power accumulates, diffuses, and is contested.

China’s sustained economic expansion, technological advancement, and growing geopolitical assertiveness represent the most significant structural challenge to American dominance since the Cold War. Unlike previous rising powers, China is deeply integrated into the global economy while simultaneously developing parallel institutional and technological ecosystems.

The result is not immediate displacement, but contestation.

The system today is not yet fully bipolar in the Cold War sense. The United States retains unmatched alliance networks, financial depth, and military projection capabilities. But it is no longer operating without peer competition. Two centers of gravity increasingly influence trade flows, technology standards, capital allocation, and industrial policy.

This is not a return to Cold War isolation. It is a form of competitive interdependence. Supply chains remain entangled. Financial markets remain interconnected. But strategic sectors — semiconductors, telecommunications infrastructure, energy systems, rare earth processing, payment architecture — are becoming arenas of power competition.

In periods of hegemonic transition, rules are reinterpreted. Institutions are selectively enforced. Alignment pressures increase. Strategic ambiguity grows.

Hegemony provided coherence. Its erosion introduces friction.

Implications for Enterprise Geopolitics

When an anarchical system is stabilized by a dominant power, global business can optimize for efficiency and scale. When that dominance becomes contested, optimization strategies must account for fragmentation and strategic rivalry.

Enterprise geopolitics is the discipline of aligning corporate structure with these structural realities.

It recognizes that rules are political constructs, not permanent fixtures; that institutional stability depends on power alignment; that interdependence can be weaponized; that regulatory standards may diverge rather than converge; and that alignment pressures intensify during hegemonic transition.

This is not about predicting the next crisis. It is about designing governance processes that assume systemic contestation rather than perpetual convergence.

For three decades, many companies operated within assumptions formed during an unusually stable unipolar moment in international politics. That moment was historically distinctive, not structurally permanent.

The international system remains anarchical. Hegemonic dominance is under pressure. Competitive interdependence is replacing permissive integration.

Enterprise geopolitics begins with acknowledging those facts.

Resilience follows from structuring the organization around what the system actually is, not what it was assumed to be.

Subscribe now

Still Life with Cake, Lemon, Strawberries, and Glass,1890, John Frederick Peto

Geopolitics is harder to quantify than financial performance and less amenable to standardized metric and so has largely remained outside the structured decision systems that govern modern corporations. It has been briefed, forecasted, debated—but not systematized. As sanctions regimes expand, industrial policy reshapes competitive landscapes, trade relationships fragment, and regulatory sovereignty reasserts itself, geopolitics has shifted from background context to operating condition. The World Economic Forum’s Global Risks Report 2026 ranked “geoeconomic confrontation” as the most significant global risk facing the year ahead—placing geopolitical rivalry above climate, inflation, and technological disruption. For enterprise leaders, the signal is unmistakable: geopolitics now sits at the top of the global risk hierarchy.

For most of the past decade, large companies have invested heavily in systems that bring structure to uncertainty. Revenue forecasts update dynamically as data flows through integrated planning platforms. Treasury monitors liquidity exposure in real time. Supply chain dashboards flag bottlenecks before production slows. Cyber and counterparty risks surface in executive dashboards instead of quarterly binders.

The modern corporation operates inside infrastructure designed to discipline decision-making. Now, armed with AI, corporate planners are attempting to impose similar analytical structure on the more elusive domain of geopolitics—feeding internal data into enterprise systems, stress-testing exposure, and modelling potential escalation pathways at speed and scale.

The early response has centered on AI-powered foresight. In-house teams are loading strategy documents into enterprise AI systems and asking geopolitical “what-if” questions. Start-ups are building geopolitical foresight engines and actively courting both investors and corporate clients. These systems ingest political data, monitor regulatory developments, simulate sanctions expansion, model tariff escalation, and generate probabilistic outlooks at scale. Used with discipline, they compress analytical timelines, expand situational awareness, and produce structured scenario frameworks.

But foresight—even AI-powered foresight—is not decision architecture.

With today’s tools, anticipation is no longer the primary constraint. The constraint is accountable decision-making under persistent uncertainty. The relevant question is not simply “What might happen?” It is: “Given what might happen, how are we structured to decide?”

An AI-powered enterprise geopolitics tech stack addresses that question. It embeds geopolitics into the same disciplined environment that governs finance, capital allocation, liquidity and treasury management, regulatory compliance, and board-level risk oversight.

Six layers define the architecture.

Layer One: AI-Driven Exposure Mapping

Most companies possess extensive operational and financial data but lack a coherent geopolitical overlay. An enterprise geopolitics stack integrates internal systems with sanctions databases, trade flows, licensing regimes, and jurisdictional risk indicators to produce dynamic exposure maps. Revenue concentration in sensitive markets becomes visible. Supply chain dependencies vulnerable to export controls are identified. Regulatory leverage points across jurisdictions are surfaced.

Large language models can parse legislation as it evolves. Machine learning systems correlate political developments with sector-specific intervention patterns—exposure shifts from being periodically reviewed to continuously recalibrated.

Geopolitics moves from anecdote to analytics.

Layer Two: AI-Enabled Signal Processing

Executives operate inside a permanent geopolitical information storm—elections, regulatory drafts, sanctions updates, and industrial policy announcements. AI can ingest thousands of feeds, summarize developments, and detect early inflection points.

But signal only matters relative to exposure. A regulatory shift in one country may be immaterial to most firms yet decisive for another with concentrated market dependence. The stack must filter developments through mapped exposure. AI’s value lies not in generating more alerts, but in generating exposure-weighted alerts.

Noise decreases. Relevance increases.

Layer Three: Scenario and Trigger Architecture

AI can model margin compression under tariff expansion, simulate layered sanctions regimes, and estimate second-order supply chain effects. Yet modeling alone does not create readiness.

Scenarios become operational only when linked to defined triggers. Leadership must specify what constitutes confirmation and what action follows. AI monitors legislative calendars, enforcement trends, and policy language shifts. When predefined thresholds are crossed, escalation protocols activate. Decision rights are clarified in advance.

The objective is not prediction. It is preparedness.

Layer Four: Integrated AI Infrastructure

Monitoring tools, regulatory databases, scenario engines, and internal dashboards must operate as a connected system rather than isolated utilities. Data flows from external developments into internal exposure maps and governance reporting. Automation reduces latency. Pattern recognition surfaces correlations that siloed teams might miss.

At this stage, geopolitics begins to resemble other enterprise systems: continuously measured, modeled, monitored, and documented.

The stack can carry an organization a considerable distance. It can reduce surprise, accelerate response, and build institutional memory.

Layer Five: Governance Integration

Boards increasingly expect clarity about how geopolitical exposure is managed. An enterprise geopolitics stack feeds structured reporting into existing governance channels. Dashboards align geopolitical exposure with financial performance. Decision logs record the context in which material choices were made. Assumptions and thresholds are visible.

This does not eliminate uncertainty. It clarifies process. Directors do not demand perfect foresight; they demand disciplined judgment.

AI systems help maintain that discipline by preserving the informational record surrounding high-stakes decisions.

Layer Six: Executive Stewardship

Even fully integrated, the stack is nothing without executive stewardship.

AI can ingest data, model outcomes, detect triggers, and document process. It cannot weigh geopolitical exposure against long-term strategic ambition. It cannot balance reputational considerations against market opportunity. It cannot stand before a board and explain why persistence in a contested market was chosen over exit, or why capital was redeployed amid incomplete clarity.

As modeling grows more sophisticated, the complexity of choice increases. Someone must integrate cross-functional implications, calibrate risk appetite, and align geopolitical architecture with enterprise strategy.

In an era of structural fragmentation, geopolitics is no longer episodic risk. It is an enduring operating condition. The advantage will accrue not to those who predict best, but to those who institutionalize decision discipline—embedding geopolitical exposure into capital allocation, governance, and executive accountability.

Among the countries of the world, there is what many international relations scholars call an anarchic system—one without a central authority capable of enforcing rules consistently. For decades, companies operated as if this condition applied only to states.

That assumption no longer holds.

As the post-World War Two and post-Cold War arrangements that once mediated geopolitical risk weaken, firms are increasingly exposed directly to the realities of an anarchic international system. Sanctions, industrial policy, regulatory fragmentation, geopolitical alignment pressures, and conflict now shape core business decisions, not merely background conditions.

Crucially, these pressures do not point in a single direction.
Different states now advance different—and often incompatible—expectations of corporate behavior, reflecting divergent strategic priorities and resurgent mercantilist instincts.

The implication is not that companies have become states.
It is that they have become actors navigating a system of competing demands.

Anarchy is not chaos—and it is not destiny

In international relations, anarchy does not mean disorder. It means the absence of a central enforcer. What happens under anarchy depends on how actors interpret one another, form expectations, and structure their interactions; this insight is usually applied to states. But it travels remarkably well to the corporate world.

Anarchy does not impose a single logic on companies.
It creates a condition in which organizational choices matter more, precisely because external expectations diverge.

Firms have long benefited from a constructed order

For much of the past seventy years, companies operated within a particular construction of international order. Institutions, alliances, trade regimes, and shared norms created relatively stable expectations. Political risk existed, but it was often buffered—absorbed by states, managed through law, or priced by markets.

In that environment, it made sense for firms to treat geopolitics as external context rather than a domain of management, a realm where they had much agency.

What is changing is not the existence of anarchy, but the erosion of the constructions that once coordinated expectations across states.

As these give way to something less settled, governments increasingly ask different things of the same firm: local production here, market exit there; political alignment in one jurisdiction, strict neutrality in another; resilience over efficiency—or efficiency over resilience—depending on domestic political imperatives.

Companies can no longer rely on a shared international framework to reconcile these demands on their behalf.

Agency has moved inside the enterprise

In an anarchic system, outcomes are shaped through interaction rather than instruction. For companies, this means that geopolitical outcomes are mediated by internal decisions:

• how risks and opportunities are framed

• how conflicting state expectations are weighed

• who owns geopolitical judgment

• how uncertainty is escalated

• and which strategic options are preserved or foreclosed

Two firms can face the same external environment—and even the same set of government pressures—yet experience very different outcomes. The difference lies not in the system itself, but in how each firm interprets, prioritizes, and responds to competing demands.

This is where insights from international political economy matter. In the absence of a single global authority, firms help create order through contracts, standards, supply chains, finance, and compliance regimes. Private authority expands precisely because public authority is fragmented—and because states increasingly seek to shape corporate behavior through indirect means.

In other words, companies are not just exposed to anarchy.
They participate in shaping how it is lived.

From awareness to ownership

Much contemporary corporate discussion of geopolitics still stops at awareness. Better scanning. Better scenarios. Better expert input. All of this has value—but it does not resolve the core issue.

Insight does not make decisions.
Organizations do.

The practical challenge of anarchy is therefore not analytical but managerial: who inside the firm owns geopolitical judgment when different countries demand different—and sometimes incompatible—courses of action?

Without clear ownership, geopolitics becomes episodic—visible in crises, invisible in planning. Responsibility fragments across functions. Decisions default to caution, delay, or lowest-common-denominator compliance.

In an anarchic system, that is not neutrality.
It is exposure.

The fiduciary dimension

Recognizing corporate agency under anarchy is not an invitation to overreach. It is a recognition of fiduciary reality.

Geopolitical factors now materially shape long-term value, resilience, and license to operate. Acting prudently often requires taking a broader view of stakeholders—not as a moral add-on, but as a practical necessity when firms are embedded in multiple political economies with distinct expectations.

This is not about predicting the future or controlling outcomes.
It is about governing how the organization responds when no single set of rules reconciles competing national demands.

Anarchy, rediscovered

Anarchy has always been the condition above the nation-state. What has changed is the extent to which companies can pretend they are insulated from it.

As familiar governance arrangements give way, firms are being forced to rediscover a lesson long familiar to states: there is no referee—only judgment, learning, and choice.

In a world of diverging national priorities and renewed mercantilism, corporate outcomes are shaped less by global rules than by how firms navigate conflicting pressures across jurisdictions.

Anarchy does not determine corporate fate on its own.
Companies do—through how they see, decide, and act.

Anarchy, increasingly, is what companies make of it