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Geopolitical risk named fastest growing danger to businesses

Businesses are dealing with a 'polycrisis', the simultaneous occurrence of several catastrophic events -

Geopolitical threats now represent the fastest-growing risk to the security and resilience of businesses, according to a report from corporate security consultancy The Clarity Factory.

Rachel Briggs, CEO of The Clarity Factory, said businesses are dealing with multiple geopolitical crises this year.

She said: “Companies are grappling with heightened tensions in the Middle East, the Russian invasion of Ukraine, China’s influence in its near neighbourhood as well as Africa and the Middle East.  

“With the highest levels of political risk and unrest for five years, business leaders face effects on everything from supply chains and operational resilience to personnel security and new market entry.”

Business leaders ranked cybersecurity (53%) as the top threat, followed by geopolitical risk (51%) and insider risk (40%).

This comes as AI scams are an increasing threat to cybersecurity. An estimated one in 12 Brits have fallen victim to AI scams, with 77% of victims losing money as a result, according to research from cybersecurity firm McAfee.

Read more: Improvise, adapt, overcome: HR in the Ukrainian war

The study found 88% think geopolitical risk has increased.

Meanwhile, 67% think the risk of extreme weather and environmental events is increasing and 66% said civil unrest is becoming more of a danger.

Meanwhile, 11% of corporate security officers said activism is one of the three biggest security risks for their organisation, and a majority (57%) say it is increasing.

Liz Sebag Montefiore, co-founder of consultancy 10Eighty, said HR leaders have become more involved in dealing with corporate risk since the pandemic.

She told HR magazine: “Business learned a lot from the pandemic and lockdown about crisis management and preparing for a worst-case scenario. HR has a lot more experience now of managing remote working and managing alternative and hybrid contracts and working practices.” 

As geopolitical challenges continue, she added that HR should continue to give a people-focused perspective on future crises to aid in C-suite decision-making.

She said: “HR needs to be planning ahead for the next crisis, whether that’s a resurgence of Covid or the spread of conflict in the Middle East or Far East. We need our organisations to be resilient and able to react decisively in the face of disruption.

Agile HR is needed to cope with the challenges we are likely to face in the near to medium term. HR that is able to take a people-centric approach while dealing with complexity, change and crisis.”

Read more: Relocating staff in a time of crisis