Pierre du Rostu, CEO, AXA Digital Commercial Platform explains why geopolitical risks will require a specialist response in the boardroom.

Once upon a time, there was only the chief executive officer, the ‘boss’. But as businesses evolved, new needs appeared, and the world grew more complicated, they were joined by others. The chief operating officer, the chief financial officer, the chief marketing officer, and the chief technical officer. Now, it isn’t unusual for companies to have chief people officers, diversity officers, sustainability officers, data officers, and AI officers.

You could be forgiven for thinking that this is a classic case of ‘role inflation’: the expansion of jobs and responsibilities in corporate environments for no real reason, with the effect of diluting the importance and authority of the more consequential positions and duties. And I’m sure that there are some instances where this is true. But on the whole, it reflects a shallow understanding of how modern businesses work, and the many and varied challenges they face. The expanding C-suite reflects the growing complexity of both the business landscape and the wider political, technological, economic, environmental, and energy landscapes.

The point is that it’s unrealistic to expect businesses to sit still when the world changes. Dedicated roles are needed when new and complex problems emerge; burdening those in existing roles simply guarantees that they won’t be able to carry out their core responsibilities to the same level as before. And this is why we can anticipate that in the coming years, perhaps months, a new member of the C-suite is likely to emerge: the Chief Geopolitical Officer.

I would go further. Global companies may soon need a chief geopolitical officer. I’ll explain why.

Many in the West still half-believe that horrors such as the conflict in Ukraine and the civil war in Sudan are largely self-contained events, whose wider effects, such as changes to the cost of energy, can be adjusted to and then ignored. But more and more, geopolitical events are having a major impact on exports, supply chains, markets, innovation, and more. Within global businesses, these are dealt with by the department they relate to. The cyber team deals with cyber risks, the risk team deals with exposure, and so on. The drawback is that everything is considered in isolation. And the whole represented by geopolitics is greater than the sum of its parts.

What a chief geopolitical officer does is draw on reliable data from a multitude of sources, look at everything together, as an integrated whole, and orchestrate activity, among other tasks, to support their organization. That might not have been needed a few years ago. But as these threats increase, it’s becoming more and more necessary to predict them, prevent them, and understand knock-on effects. Organisations need to understand these in context; but they also need to be prepared. A key task for the CGO is contingency planning: if this happens, then how should we respond, and what might follow? The plans themselves are not, in truth, the point. The point is the planning, and the sense of preparedness, familiarity, and confidence that follows.

The saying in sport is that you don’t rise to the level of your talents; you fall to the level of your training. This is how stress works. If organisations are going to respond appropriately when disaster strikes, they must be trained for them. Too many organisations risk being caught off-guard, and if, due to inexperience, they react inappropriately, then they can exacerbate the damage.

This is a major concern for shareholders who want to know that the companies they have a stake in grasp the potential harm caused by supply chain disruption, having an office in a high-risk zone, or a sudden ban on a certain good, for instance. They also want to know those companies have a response prepared should something occur. Boards are aware of this. Appointing a CGO could send the message: we know what kind of world we live in, and we intend to stay ahead of it.

Intelligent thinkers in geopolitics and risk have asked whether the CGO is truly necessary. Perhaps a Chief Intelligence Officer is the answer? Or perhaps the existing members of the C-suite should each take on a portion of what a dedicated CGO would take on entirely? These are important questions, and they point to the importance of molding each CGO to their role. No company is alike, even if they have similar concerns, and the CGO must reflect that. But distributing the CGO’s jobs across the C-suite will only add to the workload of those other chief execs and fail to bring about the focus and specialisation that the geopolitical challenges of this moment require. A Chief Intelligence Officer could work; but if you shape the CGO to the company, then the two roles seem to be different in name only.

In any case, soon, investors and regulators will stop asking and start demanding proof that geopolitics is being taken seriously. Companies should keep ahead of them. Insurers with geopolitical expertise, as well as experience and tools aimed at addressing other major global challenges, now exist, and can be invaluable partners in staying abreast of changes in a volatile world. But boards could soon be considering seriously adding a new member to the C-suite – or, at least, building out a dedicated geopolitical function to help them chart a course across these choppy geopolitical waters.