Wisdom of the Crowd: Geopolitical Risk

ACC assembled a group of in-house counsel to discuss today's geopolitical landscape and how in-house counsel should monitor it to protect the business.

Looking ahead at the geopolitical landscape

• Geopolitics play a substantial role in the future evolutions of a company’s environment.
• Businesses must understand what’s going on domestically and internationally.
• Predictability – the ability to anticipate what’s coming – is what makes businesses successful.
• Legal departments tend to solve issues that have occurred in the past. They also need to look at the future.
• Staying in touch with a network of experts who are tracking developments in a particular region is useful - they can help Legal anticipate what is on the horizon.
• When in-house counsel start seeing an issue emerge, having such a network helps to understand the practical impact that the issue has or will have on the ground.
• Legal is often called to evaluate sanctions, and to assess risks of criminal liability.
• The relationship between US and China is the basis for many issues that in-house will be dealing with (such as technology transfers, IP issues).
• Sometimes, when there is a breaking news story, the best course of action for a company may be not to say anything about it.

Legal has a key role to play in addressing the implications of a fast-changing geopolitical context

• The geopolitical landscape is fast changing, and issues are becoming more divisive, domestically and internationally.
• The legal department is often the best group positioned to assess the implications for the company. Often, there will be a collaboration between Legal and Communications on how the company addresses the implications of geopolitical situations.
• People tend to work in silos. Sometimes Legal has a broader view of the geopolitical movements, and can play a key role in educating people about the rational implications for the business.
• The instability of a country’s political regime can present a major challenge for the logistics and supply chains of a company. Outside advisors familiar with the local situation can be very helpful to understand the situation and the options.
• Before engaging a new vendor, some companies screen them by using reputational due diligence services. Various vendors offer this type of screening service.
• Companies need to be mindful of compliance with anti-bribery rules, especially in areas where there is geopolitical instability.
• It can be a fine line for a company, between explaining that investors from a given country are investing in a business (or for example, in a sports team), and getting dragged into controversies related to the geopolitical landscape.

Legal also has a role to play in addressing stakeholders' activism

• Employee viewpoints can cross the line into hate speech, including when divisive geopolitical issues arise.
• Legal has a leading role in framing the rules of expression in the workplace.
• Legal is often called upon to reinforce civility and proper conduct in the workplace. This is a leadership opportunity for in-house counsel.
• Allyship is key to create a safe environment to talk about diversity, equity, and inclusion.