Swedish risk managers told to focus on flexibility rather than resilience

Swedish risk managers should prioritise flexibility over resilience to mitigate and manage increasingly unpredictable geopolitical risk, said Andreas von der Heide, CEO and co-founder of geopolitical consultancy Consilio International, at the annual Swedish Risk Management Association (Swerma) conference.

Von der Heide highlighted the increasing geopolitical instability and its impact on global trade. “Access to supply chains and infrastructure becomes increasingly dependent on the actor controlling it,” he said.

The warnings come against a backdrop of worrying geopolitical trends ­– volatility, trade barriers, external price shocks, climate change and a rise in authoritarianism. According to Von der Heide, democracy has worsened in 60 countries during the past year. In addition, 84 countries are now less peaceful than they were in 2017.

But while this decline has led many companies to consider increasing their resilience and investing more in security, Von der Heide believes the bigger issue is the unpredictability of the global political and economic landscape. This demands flexibility.

“Right now the market is consolidating and fragmenting at the same time and there are huge question marks over what Iran and India will do, which will have a huge impact on Swedish companies,” said Von der Heide.

He stressed the need for greater use of scenario planning and stress testing but also placed huge importance on corporate and ethical values.

He cited the example of a CEO at an unnamed Swedish company that was the first to leave Russia after its invasion of Ukraine in 2022. Rather than a forensic study of the economic implications of such a move, the justification was because it was simply the right thing to do, said Von der Heide.

“Ultimately, it comes down to moral leadership and cementing those values in the corporate culture,” he said.

Geopolitical unpredictability will only likely increase if Donald Trump wins the US election later this year, according to Andreas Utterstrom, a communications consultant and podcaster who is a close observer of US politics.

“Trump is very unpredictable and slippery. He will send out a message on social media to win the news cycle of the day but it is not clear how that will relate to policy. That is a headache for everyone else, including Swedish companies, but a political strength for his hardcore support who see him as a rebel,” she said.

“When it comes to international trade, Trump is ultimately suspicious over everyone and everything. He is afraid of being taken advantage of. Everything is a zero-sum game for him. If the other person in a negotiation is happy, he will feel that he’s done something wrong,” she added.