The Association of Corporate Counsel (ACC) has released a new report detailing how US-based companies perceive and navigate geopolitical risks in high-risk regions.
The ACC’s report, “Navigating Geopolitical Risk: A Brief Guide,” is based on a survey of 200 legal department leaders from US-based organizations. The report outlines which countries pose the most significant geopolitical risks, the concerns driving these risks, and strategies companies are implementing to navigate the global risk landscape.
The survey, developed in collaboration with Professor Meg Rithmire of Harvard Business School and the US Chamber of Commerce Foundation, identified the top eight countries that respondents see as presenting the highest geopolitical risk: China, Russia, Mexico, the United States (tied with Mexico), Israel, Ukraine, India, and Taiwan. These regions were highlighted due to potential challenges around data security, intellectual property, employee safety, and navigating diplomatic crises.
According to the report, the primary concerns for companies operating in high-risk countries involve protecting intellectual property, securing sensitive data, competing in global markets, and ensuring employee safety. Specific risks identified include threats to company networks and potential military or diplomatic crises that could impact business continuity. Notably, over half of the respondents indicated a trend toward maintaining or increasing engagement with high-risk countries, except in Russia, where 53 percent indicated plans to cease engagement entirely. By contrast, only 10 percent of respondents planned to disengage with China.
In response to these risks, companies have implemented several strategies aimed at risk mitigation. Nearly half (49 percent) of the surveyed organizations have introduced new due diligence processes, while 45 percent have enhanced education and training on risk management. Other measures include scenario planning (43 percent) and consulting with external experts to better understand and navigate these complex geopolitical landscapes.
ACC President and CEO Veta T. Richardson emphasized the importance of these insights for in-house counsel, noting, “Geopolitical risk is a significant and rising source of concern.” Richardson explained that the interconnected nature of today’s world makes companies vulnerable to a variety of issues, from regional conflicts and health crises to supply chain disruptions and climate-related challenges. “ACC is proud to contribute the in-house perspective to the important work being done by Prof. Meg Rithmire and the US Chamber of Commerce Foundation to help businesses successfully cope with changing and long-term geopolitical risks,” said Richardson in a statement.
Professor Meg Rithmire highlighted the critical role of legal officers in guiding firms through these risks. She noted that legal departments now play an active role not only in compliance but also in forward-looking strategies to protect company assets and reputation. “It is especially interesting to learn how many companies have initiated new processes for managing geopolitical risks,” Rithmire stated. “We are learning that geopolitics is reshaping transnational commerce, for sure, but also company governance.”