Geopolitical risks and fears that ongoing conflicts in Ukraine, the Middle East, and Sudan could spread or even worsen are a top concern for business leaders in 2025.
“We are living in a more competitive geopolitical environment,” said Mirek Dušek, managing director at the World Economic Forum, in a virtual conversation hosted by Fortune and Diligent as part of the director roundtable series. “We have, some would say, a record number of conflicts around the world.”
The World Economic Forum’s recently published 20th annual global risks report found that geopolitical concerns about state-based armed conflict constituted the primary risk for 2025, ranked No. 1 by 23% of respondents. Extreme weather events ranked second, and geo-economic confrontations, which includes sanctions and tariffs, were the third-most prominent risk. The survey reflects the views of over 11,000 business leaders globally and more than 900 experts from academia, government, international organizations, and civil society.
Another recent study, by software-as-a-service company Diligent, in partnership with publication Corporate Board Member and management consulting firm FTI Consulting, found that a “strong majority” of surveyed board members from publicly traded U.S.-based companies were worried about the adverse impact of a shifting geopolitical landscape. Most of the responses in the survey were recorded before the 2024 presidential election, though Diligent noted leaders were still cognizant that geopolitical risks were on the horizon.
“There’s sort of a feeling that things could change rapidly and dramatically, and you might not be ready for what’s about to come,” said Dottie Schindlinger, executive director of the Diligent Institute.
The looming threat of tariffs
Less than two weeks after President Donald Trump was sworn into office for a second time, tariffs have become a tool the administration has deployed to extract concessions from other countries. While the administration backed off threats of imposing 25% tariffs on Colombia after the South American nation agreed to repatriate migrants, Trump is threatening to impose tariffs on Canada and Mexico this upcoming weekend unless they do more to prevent illegal immigration and stop the flow of fentanyl into the U.S.
Trade conflict is also a concern in Denmark over a spat involving a U.S. effort to take over Greenland. And in China, where the Biden administration added tariffs on some Chinese products last year, a 10% tariff on all goods from the country that are exported to the U.S. could go into effect this weekend.
“If the coming months see a spiral of tariffs and other trade-restricted measures globally, the economic consequences could be significant,” said Saadia Zahidi, managing director at the World Economic Forum, in the group’s report. Higher tariffs would decrease global trade and increase the price of imported goods.
Dušek said one way business leaders have responded is by hiring dedicated experts who can advise CEOs and the board on the trends and geopolitical risks and how a company can respond to those concerns.
“It’s undeniable that there is a clear trend where companies in the past who didn’t pay as much attention to geopolitical risks are paying more attention,” said Dušek.
Among the other findings from the World Economic Forum’s report: Misinformation and disinformation were ranked as the top risk over a two-year time horizon, while worries about the environment and climate were the dominant risk for the 10-year horizon. Technological risks, which includes the quick advancement of generative artificial intelligence technologies, was not deemed an immediate concern, but was one of the risks that climbed the most in the 10-year risk ranking.
“It seems that whenever there is a new technology, it takes a while for leaders that we survey to really wrap their heads around what the risks are,” said Dušek.
The risks and rewards of AI
Diligent said half of the directors it surveyed say they see more potential than risk from AI and generative AI, while the other half holds the complete opposite view. “We’re evenly split on whether we lean risk or potential when it comes to AI,” noted Schindlinger. “The truth is we need to think about both.”
The U.S. stock market was jolted earlier this week, in particular many technology stocks, amid concerns over rising international competition from Chinese AI company DeepSeek. DeepSeek unveiled new chatbot technology that uses a fraction of the computer chips that American-based AI rivals utilize, raising questions about the billions spent by AI hyperscalers like OpenAI and Meta.
“It just confirms how important it is to pay attention to this technology overall and how dynamic this space is,” said Dušek. “If companies are paying attention to geopolitics and trying to invest in leadership there, equally and maybe even more so, it is important for [every] sector to be quite well informed about what these technologies can do for their business.”
Schindlinger said Diligent’s survey also uncovered some priorities that have changed pretty drastically from the trends of the past few years. Three out of every four directors are now prioritizing growth opportunities rather than cost cutting, a focus over the past several years.
And after a long stretch of cybersecurity ranking as the most challenging issue that directors were asked to oversee, this year, 41% say “strategy” is their top vexing issue. Schindlinger noted that they are having difficulty understanding how the strategy will translate into business results.
CEO and C-suite succession planning is another concern, likely due to the fact that 2024 saw the largest-ever number of CEO departures from U.S. public companies on record, eclipsing 2023’s record. Succession ranked fourth on the list of priorities in Diligent’s survey, while it was the second-most challenging issue that boards oversee, and third on the list of most pressing agenda items for the board to discuss.
“We’re seeing an uptick in the number of CEOs that are leaving public companies, some for retirement, but many for other opportunities in the private sector,” said Schindlinger.
