Athanassios Gouglas says that the most valuable hire of 2026 will be people who can read power, not just markets

For most of the last three decades, businesses treated geopolitics as context and the rule of law as a dependable constant. That era is ending. Over the next 12 months, the biggest board-level risk will not be a single war, election, tariff line, or cyber incident. It will be the widening gap between how firms think governance works with rules applied predictably, contracts enforced neutrally, regulators acting consistently and how governance increasingly behaves in practice selective enforcement; rapid policy lurches; and blurred lines between politics, security, and commerce.

This is why the most strategic capability for 2026 is not another dashboard with country scores and geopolitical risk heat maps. It is people who understand how to navigate governance arrangements when the rule of law erodes. Professionals who can map who decides, who enforces, who can veto, what informal rules matter, and how quickly those rules can change.

What the next 12 months are likely to look like.
Geoeconomics will harden into industrial policy with market access increasingly conditional.

Globalisation’s commercial logic is being re-ordered by geopolitical risk, with deglobalisation pressures, supply chain vulnerabilities, energy security politics, and US–China strategic competition shaping costs and sourcing decisions. Governments are putting national and economic security ahead of corporate commercial interests, while ‘market-shaping’ legislation and trade policy are increasingly driven by geopolitical sensitivities.
For business, this means the question is no longer ‘is the market attractive?’ but ‘is our presence aligned with the host government’s strategic priorities and can we demonstrate it?’ Expect more ‘friend-shoring’ logic, more scrutiny of cross-border investment, and more policy-driven winners and losers in strategic sectors.

Cyber risk will continue to fuse with geopolitical conflict and spill into financial stability.

In a context of rising geopolitical tension and fragmentation, state-sponsored cyberattacks are a growing feature of hybrid conflict, with potential for systemic disruption and cascading effects, especially as critical services depend on concentrated third-party providers and cloud infrastructure.

Boards should plan for cyber not only as ‘IT risk’ but as an instrument of statecraft that can trigger operational shutdowns, contractual disputes, regulatory investigations, and reputational crises across jurisdictions, often simultaneously.

Why rule-of-law erosion is the number-one business risk
If geopolitics is the weather, the rule of law is the building code. When that code weakens, everything else becomes harder to price.
The free market relies on rules enforced fairly and predictably; chaotic deregulation and selective enforcement upend investor confidence, and rule-of-law slippage is observable globally (including in the US) in multi-year trends. The consequence? Erosion in the rule of law creates corporate governance gaps and risk exposure for general counsel and chief legal officers precisely because legal outcomes can no longer be assumed to track legal merits alone. Political dynamics increasingly shape what enforcement looks like in practice.

Business-critical
In the next 12 months, this is likely to show up in four business-critical ways:

  • Contract risk becomes political risk. Disputes are more likely to be ‘resolved’ via regulatory pressure, media campaigns, or informal channels, rather than predictable adjudication.
  • Compliance becomes a competitive differentiator. The ability to monitor, interpret, and influence fast-moving regulatory shifts becomes strategic, not administrative.
  • Reputational risk globalises. Employee and consumer pressure to take positions on global issues increases, and neutrality is less available, especially in polarised environments.
  • Capital allocation gets stickier. When enforcement is selective, investors price uncertainty more harshly; projects demand higher returns or get cancelled.

The practical implication for UK businesses
This is the year to treat governance literacy as a core business skill. Not ‘government relations’ as a bolt-on, but the capability to navigate institutions and incentives across jurisdictions, understanding formal law, informal power, and the speed at which the two can diverge.

In 2026, geopolitical risk preparedness will be decided by whether business organisations have people who can translate governance into operational decisions: where to locate data, how to structure partnerships, what to disclose, how to respond to an investigation, which stakeholders actually matter, and when to exit early rather than litigate late.

In a world where the rule of law is less reliable, the competitive edge is not bravado. It’s navigation.

Athanassios Gouglas is Director Master of Public Administration – UWS London and Vice Chair Communications UK Association for Public Administration
www.uwslondon.ac.uk