Geopolitical Risk Is the New Reality for In-House Teams

Life was much simpler for in-house counsel just a few years ago. GCs knew where employees were because they knew where the company’s offices were. They haggled over contractual issues, warded off legal threats, and maybe lost some sleep over mounting regulatory obligations. Those days weren’t without stress, but the fires—while usually unexpected—were familiar.

What a difference a few years makes. The office of the general counsel has been handed hugely complex, first-time-ever, undeniably urgent problems to solve—one right after the other. This Bloomberg Law special edition brings you perspectives on the swift rise of geopolitical risk and the ways in-house counsel are adapting to meet the challenge.

We all know the list well: a global pandemic, multiple war and conflict zones, disrupted supply chains, remote work, vulnerable networks, artificial intelligence. It’s a list that emphasizes how interconnected we are globally and how risk—reputational, economic, and physical—extends into geography and situations far and wide. It’s also a list of unforeseen risks that companies worldwide are relying on their in-house counsel to wrangle.

Read about one leader who can take on these risks—the chief resilience officer. This cross-functional role is appearing in more boardrooms in response to growing global conflicts. Morrison Foerster’s Saqib Alam says a chief resilience officer is well-positioned “to quickly coordinate cross-functional teams that span geographies and business units” and “facilitate barrier-free access to key decision-makers in times of crisis.” Read More

Today’s wars provide lessons for navigating shifting targets of sanctions and export controls, including new Russia sanctions. Hughes Hubbard & Reed’s Kevin Carroll, Michael Huneke, and Sean Reilly explain that “all US companies engaged in international commerce, directly or indirectly, are expected to maintain compliance programs that screen for, and avoid transactions with, targeted persons and entities.” Read More

We also share a deep dive into the FCC’s focus on national security gaps in telecommunications. Cooley’s Robert McDowell, J.G. Harrington, and Henry Wendel consider the effects on industry of the FCC’s efforts “to mitigate the risk that adverse foreign threats use US telecommunications networks or consumer devices to obtain sensitive information.” Read More

In this series, we’ve featured commentary from people leading the discussion in boardrooms, law firms, consultancies, and academia. They propose ways to design risk policies that acknowledge geopolitics and build in safeguards. They highlight growing risk areas and the enforcement outlook for multinationals. And they drill down into the opportunity and responsibility that the office of the general counsel has in the new normal.

Rutgers Business School’s Kevin Kolben writes that while supply chain disruptions are nothing new to globally integrated firms, labor is one area “that has been underestimated” and poses “reputational and now increased legal risk for firms that are highly dependent on global procurement and supply chains.” Read More

Jenner & Block’s Marcus Childress, Josh Hsu, and Donovan Hicks assess federal scrutiny of “the US economic, human rights, and technological relationship with China” through a business lens, and say “US investment in China-based companies that might impact national and financial security” deserves careful attention. Read More

Infortal’s Christopher Mason and Ian Oxnevad say “financial crime depends on innovation to stay ahead of law enforcement, and new tactics are constantly emerging.” They write that “the responsibility of interpreting the impact of global conflict on illicit banking and regulatory enforcement falls on general counsel.” Read More

Gartner’s Chris Audet says a carefully designed human rights policy clarifies how a company is delivering on its ESG strategy and heads off issues before they arise. It would “help establish explicit and comprehensive standards in response to evolving expectations,” and “compliance leaders should play a critical role” in that effort. Read More

In his latest Good Counsel column, Rob Chesnut has blunt advice. “Look to your left and right,” he writes. “If no one in the company is outlining a strategy for addressing geopolitical risks in 2024, the job is probably falling to you as the in-house legal leader. Congratulations.” But, he says, you don’t have to do it alone. Read More

Deloitte’s Beniamino Irdi picks up where Chesnut leaves off, sharing a framework for “resilience against multi-faceted and connected risks” and “a scenario plan for a potential ‘polycrisis’ in the mid-term. He says legal departments should “incorporate geopolitical factors into all levels of corporate risk planning and strategy.” Read More

Hogan Lovells’ Stephanie Yonekura and Matthew Sullivan pivot to their high-level assessment of global regulatory and enforcement challenges that could bedevil multinationals’ compliance efforts this coming year. Read More