Geopolitics and corporate governance: Are boards of directors prepared for an era of global uncertainty?

Abstract

In an era of increasing geopolitical uncertainty, businesses must navigate a complex landscape shaped by trade conflicts, national security concerns, and shifting global power dynamics. While corporate leaders acknowledge the growing significance of geopolitics, it remains unclear whether boards of directors possess the necessary competencies to assess and respond to these challenges. This article examines the extent to which geopolitical expertise is integrated into the qualification profiles of board members in Germany’s DAX 40 companies. Using an empirical analysis of qualification matrices mandated by the German Corporate Governance Code (GCGC), the article assesses whether boards include members with geopolitical skills and expertise. Findings indicate a pronounced lack of geopolitical expertise, as most firms fail to adopt systematic approaches for integrating such competencies into board composition. The article concludes with practical recommendations for strengthening board-level geopolitical expertise through targeted recruitment and training. Given the rising strategic relevance of geopolitics, boards that fail to integrate such expertise risk impairing their ability to guide companies in an increasingly fragmented global economy.