Page 43 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
would be the potential geopolitical risk of the enough not to lose sight of near miss events,
organisation. While precise measurement of occurrence of which emitted signals of systemic
risks is not possible mangers can very well vulnerabilities. A mechanism for continuous
reduce the entailed uncertainty. Key objective learning need be put in place in organisational
would be to evolve understanding of the key heart and mind. This would motivate and drive
drivers and possible outcomes to mitigate the people to constantly evaluate what is being
impacts of eventual surprises! Action centre done, what to be dispensed with and new
may be set up to spearhead identification of things to be done with the ultimate objective of
risks having potential to disrupt business lowering the chance of occurrence of crisis and
operations significantly and evolve mitigation improve the response when it eventually hits.
strategy and prepare wherever required
Prudence in geopolitical risk management lies
responses to Government inquiries into
sensitive issues. in understanding how to deal with cross border
issues. For the purpose economic agents need
Integration of geopolitical risk analysis into evolve own internal guidance on the modalities
business decision making process would be of interfacing with geopolitically sensitive
essential for effective risk management. Ad matters. The wider strategic landscape, full
hoc analysis for addressing the perceived range of risk scenarios and consequences, or
geopolitical risks as and when the event arises key decision points deserve focused attention.
need be avoided. Keeping constant vigil over Global business entities need proactively
the trend of potential risks and emerging manage risks and threats posed by heightened
opportunities will improve the quality of global political conflicts and frictions having
decision making. potential to impact operations, performance
and people. Organizations need be in readiness
Three strategies are mostly useful in
to respond to geopolitical risks farming a term
mitigating identified geopolitical risks. They structured (viz.,short-term, midterm, and long-
are dispersion of critical assets, creating surge
term) strategies to effectively respond to a
capacity and built in a slack in the supply chain fast-changing situation or emergency and also
and working in liaison with peers sharing risk gainfully avail of the potential opportunities as
assessment and mitigation strategies. A good
when perceived to reap comparative advantage
system and team need be in place for timely and become more resilient.
warning and action. An effective warning
system would constantly sift through a wide Companies operating in high risk markets
range of information sources and put in place facing potential threats of political instability
a protocol for automatic triggering, by well or the threat of international sanctions,

mapped functionary , of well-defined response may consider developing market-specific
to specific conditions sensed in the radar. assessments and strategies clearly articulating
the organization’s priorities in the high-risk
Ability to learn from near miss events assumes market and the modalities of assessment and
great importance in effectively responding to management of risks consistent with the goals
geopolitical risk events. Near miss events are
for operations and performance. The risks to
those which could have had serious adverse be assessed could be financial, safety hazards,
impact which the organisation escaped due
legal, political, or reputational.
to sheer luck. Management should be agile

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