Himamauli (Him) Das has spent much of his career at the intersection of geopolitics, economics and national security. A former senior official at the U.S. Treasury Department and White House, Das now serves as senior managing director and counsel at K2 Integrity, where he advises boards, executives and multinational organizations on geopolitical risk, economic security, sanctions and regulatory strategy. 

From his perspective, the global economic environment has undergone a fundamental transformation: The relatively stable framework of free trade and globalization has increasingly given way to one shaped by national-security priorities, strategic competition and economic restrictions.

How can boards identify material geopolitical risks?

The changing relationship between economic policy and national security means geopolitical developments can affect business operations more directly than in previous decades. Governments increasingly use tariffs, sanctions, export controls and investment restrictions to advance strategic objectives, extending geopolitical considerations into commercial activities once viewed as routine.

But that doesn't mean boards should react to every international development.

"Not every geopolitical event or political development translates into material business risk," Das explains.

Instead, he recommends beginning with the business itself. Executives should understand their critical suppliers, customers, counterparties, financing sources, technologies and operational dependencies. With those exposures clearly identified, they can assess whether a geopolitical event has a meaningful connection to the organization.

One particularly important signal is how governments respond. A regional conflict or diplomatic disagreement may have limited immediate consequences for a company, but subsequent sanctions, tariffs or export controls can quickly change its commercial implications.

The distinction is essential: Boards need to understand not simply what's happening in the world, but what those developments could mean for their organization.

Assessing direct and indirect geopolitical risk across the business

Identifying material geopolitical risks requires looking beyond a company's direct operations.

A new trade restriction might not apply to the organization itself but could affect a critical supplier, lender, logistics provider or customer. A regional conflict could disrupt energy markets, transportation routes, or access to essential commodities, affecting businesses with no physical presence in the affected region.

Das encourages executives to examine both direct and indirect exposure across supply chains, financing, technology, market access, regulatory obligations and growth plans.

That includes identifying concentrations and single points of failure throughout the business ecosystem, not just among immediate suppliers, but also sub-suppliers, counterparties, technology providers and critical infrastructure.

The importance of this broader perspective becomes apparent when geopolitical events trigger second- and third-order consequences. An organization may initially believe it is insulated from a development, only to discover that a supplier's exposure or a change in financing conditions creates an unexpected vulnerability.

Trade and tariff disputes offer a practical example. What initially appears to be a government-to-government disagreement can force companies to reconsider supplier concentration, pricing, margins and capital investment.

The lesson for boards is that geographic distance does not necessarily translate into business insulation.

How to communicate geopolitical risk to the board

Even when executives identify meaningful geopolitical exposure, communicating that risk effectively presents another challenge.

Board members need sufficient information to understand emerging threats without becoming overwhelmed by every international development.

Das recommends a three-part approach.

• First, identify the geopolitical developments that could actually matter. Management should explain which events have a plausible connection to the company's markets, suppliers, counterparties, technologies or strategic priorities.
• Second, translate those developments into business consequences. Rather than simply describing a conflict or policy announcement, executives should outline potential operational and financial implications, relevant exposures and plausible scenarios.
• Third, explain what management is doing about them. What mitigation measures are available? Which decisions might become necessary? And what developments would move an issue from monitoring to action?

This approach shifts the boardroom conversation from geopolitical awareness to strategic preparedness.

Scenario planning is especially important because geopolitical events rarely follow a predictable path. Das recommends planning at two levels: First, examining how the geopolitical event itself could evolve; then assessing how each potential outcome could affect the organization.

Rather than relying on a single forecast, executives should consider alternative pathways, identify indicators associated with each scenario, and reassess them as circumstances change.

The objective isn't to predict every geopolitical outcome. It's to understand how different outcomes could influence the business and preserve the ability to respond.

When geopolitical risks require a change in business strategy

Not every geopolitical disruption requires a fundamental change in strategy.

Organizations may initially respond by increasing inventory, changing suppliers, diversifying counterparties or strengthening compliance controls. These tactical adjustments can help manage immediate exposure while preserving operational flexibility.

But boards must also recognize when a temporary disruption is becoming a structural challenge.

According to Das, the strategic question arises when tactical measures no longer adequately address the underlying risk, or when maintaining flexibility becomes more costly than the value of keeping options open.

Persistent sanctions, trade restrictions, political tensions or competing regulatory regimes may require executives to reconsider more fundamental assumptions about where the organization invests, sources materials, manufactures products or conducts business.

At that point, geopolitical risk management becomes inseparable from corporate strategy.

The board's responsibility is not simply to ensure management has contingency plans. It's to challenge whether the assumptions supporting existing business decisions remain valid.