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Political Risk and Technology are Global Executives’ Hot-Button Issues In 2017, Have Implications for HR

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More than 90% of C-suite executives and board members are making or are considering making changes in their supply chains and international footprints due to the current political and economic environment, according to a July 2017 A.T. Kearney Global Business Policy Council study.

C-suite executives see challenges in rising political risks and increasingly populist and protectionist policies in democratic countries. For the second year in a row, respondents also indicated that worsening tax and regulatory policies remain as challenges but they also continued to focus on the role of technology on both the opportunities and challenges sides. 43 percent of executives pointed to cybersecurity as their biggest concern, and 85 percent of global executives believe cyber attacks will become more frequent and costly over the next year. And while 33 percent of those surveyed view technology adoption as a top challenge, 38 percent see it as a top opportunity: 78 percent of executives believe technological advances will lead to increased global productivity growth in the coming year.

The study offers concrete recommendations for businesses wondering how best to thrive in the current global operating environment:

  • Improve cybersecurity defenses and protocols. While many aspects of technology adoption and disruption provide business opportunities and challenges, executives’ most crucial priority over the next year should be improving cyber security. Recent cyberattacks have demonstrated shifting and growing (both in scope and scale) threats; such attacks are likely to increase in the next 12 months. Investments to bolster cyber defenses are required, starting with cyber behavior policies, cybersecurity training for all employees, and C-suite exemplarity.
  • Actively monitor political risks. While the global C-suite is clearly aware of the heightened risk that geopolitics and domestic policy and regulatory developments pose to their businesses, executives should invest in active political risk monitoring and government relations capabilities in key markets, with the goal of avoiding potentially surprising policy developments and helping to shape business-friendly government policies.
  • Use strategic foresight to stay ahead of the curve. Many of the global trends and developments in evidence today had their antecedents a year or more ago. Incorporating strategic foresight methodologies into a company’s strategic planning process enables executives to be far better positioned to succeed.
  • Assess globalization strategy. Global executives agree on the need to adapt their globalization strategies to the changing environment. However, the appropriate strategy depends on how geopolitical tensions and anti-globalization trends may affect each company’s unique international footprint, supply chain, and business model.

In this publication’s view, teams in charge of global HR management can and should play a key role in support of their boards and colleagues in the C-suite, especially in the following areas:

  • developing group-wide cybersecurity training and cyber risk awareness;
  • identifying local staff capable of monitoring and possibly influencing government policies and regulations, whilst ensuring compliance with anti-corruption laws and with ethical rules;
  • providing early input on human resource aspects of scenarios under consideration during the strategic planning process and/or the review of globalization strategies – local senior management lineup, talent management, reductions-in-force, rewards, pension liabilities …

The study, administered to 400 senior executives of global corporations with revenues of $500 million or more, was conducted in April 2017. About 27 percent of respondents are CEOs and about 18 percent are board members, with the remaining 55 percent comprised of other C-level executives.

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