Course description
International Business School: Module 1 - Geopolitical Risk in International Business
The pandemic has accelerated the drivers of geopolitical change, entrenching the bipolar confrontation between the US and China, the reconfiguration of international supply chains and the declining commitment to international law. An increased focus on sustainability and climate change, rising inequality within and across nations, the dominance of big tech and the rise of cryptocurrencies, is rapidly shifting the global balance of power.
For multinational corporations, the impact a single event or policy shift can exert on their operations, is magnified through a complex web of interrelated dependencies. The physical locations of premises, complex supply chains, geographically mobile workforces and cyber connectivity have led to greater risk exposure emanating from the cross-border transfer of goods and currency exchange.
These challenges are exacerbated by the increase in sanctions and trade barriers, which demonstrate that governments now expect companies to adapt to and comply with the restrictions they impose to achieve geopolitical objectives. As governments prioritise national security concerns over economic and supply chain disruption, it is essential for multinational corporations to adopt robust geopolitical risk management strategies to succeed.
Through case studies, practical examples and discussion, this course will provide the tools to navigate the interlinked geopolitical risk drivers and their impact. This will provide a strong foundation for prevention and protection against them and is essential for individuals and companies determined to maintain a competitive advantage.
Upcoming start dates
Who should attend?
Who Should Attend?
This course will be of most value to:
- Risk managers
- Insurance brokers and underwriters
- Traders and investors
- Investment banking analysts and associates
- Credit analysts
- Sovereign risk analysts
Training content
Day One: Understanding Geopolitical Risk and its Impact
Session 1: Country, Sovereign and Political Risk
- Country risk – structural factors, exchange rate risk, transfer risk and expropriation risk. Commodity price risk. Instability / political violence risk.
- Sovereign risk - economic structure, FX exposure, devaluation, economic default, political default, sub-sovereign risk.
- Political risk – institutional structure, separation of powers, ideology, international alliances.
Exercise (in pairs): Participants will analyse the differing causes of two major sovereign defaults for lower and higher rated sovereigns.
Session 2: Why Geopolitical Risk Matters
- Economic and political consequences of non-payment
- Global contagion and international systemic risk
- Sector specific impacts and supply chain disruption
Exercise (in syndicates): Participants will identify three geopolitical risk events that have occurred in the last 30 years and explore their economic consequences.
Session 3: Strategies to Manage Geopolitical Risk
- Exchange rate or interest rate trading, sovereign bonds, trade credit, bank lines, project finance
- Risk mitigation strategies, political risk insurance, export credit guarantees, government guarantee, deal structure
- Scaling geopolitical risk exposure with financial products
Exercise (in pairs): Participants will analyse different investment strategies given rates of return, relative risk and contrasting markets.
Session 4: Sovereign Ratings as a Risk Mitigant
- The value of sovereign ratings as a measure of a country’s credit worthiness
- Economic growth, inflation, purchasing power parity, income levels
- Foreign exchange system risk profiles
- Sovereign ratings as foretellers or precipitators of crises
Exercise (in syndicates): Participants will consider a sovereign debt crisis case study and analyse the value of sovereign risk ratings as an indicator of potential crises.
Session 5: Workshop Review
- Recap on key objectives and how these have been addressed
- Action planning points
Day Two: Practical Application of Geopolitical Risk Management Strategies
Session 1: Measuring Geopolitical Risk: AI, Big Data, Quantitative and Qualitative Approaches
- Quantitative versus qualitative approaches
- Applying AI and big data in geopolitical risk ratings
- Identifying early warning signals and dealing with change
- Identifying key issues and interpreting trends in financial and economic data
- Managing disparities in quality, quantity and timeliness of data
Exercise (in syndicates): Participants will analyse a range of inputs into a risk model, including objective and subjective factors and defend their validity.
Session 2: Managing Geopolitical Risk in Fixed Asset Investments
- Mitigating the factors that heighten the vulnerability of an investment to geopolitical risk
- Identifying and managing the interests of all stakeholders in long term investments
- Determining optimum tariff pricing for utilities and infrastructure projects
Exercise (in syndicates): Participants will analyse a case study of a fixed asset investment and identify ways to enhance the geopolitical risk management strategy of the investing company.
Session 3: Understanding Culture as an Investment Risk
- Managing the challenges of cultural relativism when investing in new markets
- Navigating different investment landscapes and business practices
- Cultural expectations and global brand reputation in the social media age
Exercise (in syndicates): Participants will analyse a case study of a company that adopted a policy of cultural relativism in its international investments and the impact this exerted on its global brand reputation.
Session 4: Managing Geopolitical Risk in the 2020s
The Geopolitics of Crypto Currency and ‘Green’ Energy
- Applying lessons from history to a new context
- Assessing cyber security as a new form of geopolitical risk
- Climate change, ‘green’ energy and the reshaping of geopolitical risk
- Crypto currency, decentralised finance and the global balance of power
Exercise (in pairs): Participants will complete a number of short exercises involving geopolitical risk scenarios.
Session 5: Workshop Review
- Recap on key objectives and how these have been addressed
- Action planning points
Costs
Course fee: £2645 + VAT
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