Many chief executives and board members have spent the majority of their careers in a business environment characterized by relatively open flows of trade, people and information as well as generally stable global alliances. However, the past five years have brought a series of sweeping changes to the international order that increasingly appear to be structural rather than cyclical. The risk landscape is more global, interconnected and fast-moving than ever before, which increases the importance of managing and mitigating those risks and being early to identify opportunities to secure a competitive edge.
In collaboration with the EY-Parthenon Geostrategic Business Group, the EY Center for Board Matters explored how leading boards are adapting their oversight activities to navigate a more complex, fragmented and uncertain international business climate. There have been dramatic changes in the way board members are addressing geostrategic risks and opportunities in just the past few years. For example, the EY-Parthenon’s Geostrategy in Practice survey found that in 2025, 84% of organizations reported that their board of directors assessed the impact of political risk on the company’s existing strategy compared to 40% in 2021.
The survey’s findings point to three questions directors should consider:
1. Is the board staying sufficiently informed to help manage global macroeconomic, trade, regulatory and policy matters?
The biggest change in the survey results between 2021 and 2024 was the increase in directors who reported that their board regularly receives political risk briefings from external subject-matter experts, rising from just 16% in 2021 to 82% in 2025. The survey also revealed a large increase in the percentage of boards that regularly get briefings on these topics from company management.
However, directors should devote attention to the quality of the geopolitical information they receive, not just the quantity or frequency. Leading boards set expectations that the format and content of board reports will enable constructive dialogue during board meetings. Reports should be focused and forward-looking while featuring analysis of trends, patterns, implications and business impact and using easy-to-consume formats such as summaries, callouts, graphics, audio and video.
How those in the boardroom use the information is also critical. Directors repeatedly say that their number-one priority for improving the quality of board meetings is spending more time in open discussion and less time listening to management presentations. The best insights and analyses are useless if board members do not have an opportunity to discuss and debate their impact on strategy and long-term value creation.
2. Do existing transaction and alliance plans reflect new geostrategic realities?
Joint ventures, partnerships, spinoffs and acquisitions can help catalyze innovation, growth and competitive advantage. The EY-Parthenon survey found a dramatic uptick in the percentage of directors who say their board regularly incorporates political risk considerations into areas such as mergers and acquisitions and market entry, surging to 77% in 2025 from 25% four years earlier. This is happening via strategic portfolio reviews, constructive challenges of deal assumptions and close monitoring of post-deal integration and change management. Board members should consider the following questions:
- How are international developments—including taxes, trade, tariffs, immigration policy and consumer preferences—affecting our portfolio strategy and decisions about deployment of capital?
- How is board oversight enabling a future-back view of how the company’s competitive landscape might change over the long term given emerging trends, and how are related discussions informing the company’s transaction strategy?
- What are the core assumptions that must be true for a deal to succeed and what is management’s plan if the facts on the ground change?
- How can the board and management use the successes and failures of past deals to mitigate common missteps in processes related to transactions or alliances?
3. Is current scenario planning fit for purpose?
Scenario planning is an area of improvement for boards and senior management teams to consider as it was the geostrategy oversight activity survey respondents cited least frequently. To address that deficiency, they can start with a conversation about risk appetite: How well aligned are the board and senior leadership on what the appropriate levels of risk to take are with respect to areas like global mergers and acquisitions, joint ventures and partnerships, supply chain, cybersecurity, and talent?
From there, the board can explore questions such as: Do management’s scenarios for either downside risk (existential threat to the company) or upside opportunity (significant outperformance) consider a broad enough range of outcomes? What metrics provide early-warning indicators that a negative or positive scenario could be materializing and what would be the trigger points for deciding to act?
Governing Amid Ongoing Volatility and Uncertainty
While the exact shape of the international order in 2026 and 2027 may be difficult to predict, geopolitical fragmentation is combining with the momentum of megatrends such as technology transformation, climate change and demographic shifts to create a baseline level of volatility and uncertainty for businesses that seems likely to continue. Directors need to take these new geostrategic conditions into account by integrating an informed global perspective on opportunities and risks into the work of the board.