The Risk Cascade

North Korea’s thumb in the eye to the United Nations and continuing street protests in Thailand remind us how quickly economic risks turn into political risks.  What we mustn’t miss is the degree to which political risk turns into reputation risk.  Multinational corporations are the easiest targets when people and nations take to the streets.  Actions and positions that seem benign one week can look malicious or, at best, thoughtless as societies polarize.  Since geopolitical turbulence is likely to increase rather than decrease over the next few years, we think it’s time to invest in political risk analysis, the sort of work produced by the Eurasia Group or Oxford Analytica.  Reputational crises can come from anywhere but a good political risk assessment can help you avoid a few self-inflicted ones.

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