A new operating landscape is here. If there are corporate boards that have not, as of spring 2026, recognized that geopolitics and geoeconomics have entered the boardroom and are completely overhauling the interiors, they may already be costing shareholders far more value than they create. Recent developments make this shift difficult to ignore.
The Chinese government has introduced new regulations on industrial and supply chain security, explicitly framing supply chain production as a matter of national security. Investigations can reportedly be launched into actions deemed to endanger the country’s industrial stability, with countermeasures, including bans and restrictions, applied to any foreign entities or international organizations. This points to a wider trend: supply chains are increasingly evolving from commercial systems to instruments of state power.
The French government has announced plans to move away from Windows to Linux, potentially reshaping the competitive landscape for software operators, even as structural dependencies, such as reliance on non-European hardware, underscore the limits of rapid technological sovereignty. It has also been widely reported that oil tankers transiting the Strait of Hormuz have been paying passage in yuan, challenging long-standing assumptions about dollar dominance in global energy markets, a symbolic but closely watched development in the gradual diversification of settlement currencies.
Appearing in front of the Senate Banking Committee on April 21, Kevin Warsh noted: “There are risks to the U.S. position in the world, including economic.” He pointed to the importance of a coordinated statecraft agenda. Shortly thereafter, Treasury Secretary Scott Bessent indicated that the UAE and several Gulf and Asian economies had requested dollar swap lines from the U.S., a reminder that, even amid diversification pressures, global demand for dollar liquidity remains structurally embedded.
From The End of History and the Last Man in 1992 to The World is Flat in 2005, a generation of thinking about unfettered free markets shaped corporate governance, often assuming a minimal role for the state. In 2026, however, the World Bank released “Industrial Policy for Development: Approaches in the 21st Century,” with its chief economist conceding that its earlier stance “has not aged well,” signaling that the state is no longer a peripheral actor in markets but a central architect.
It is a truism in geopolitics that nation-state interests are permanent, while alliances are transient. National mandates and ambitions are increasingly determining the definition of prosperity, which is a role corporations once largely occupied on their own.
How should boards respond?
The board’s mindset needs to change—because the operating model already has. If more nations adopt restrictive and potentially punitive supply chain and national security policies, the prevailing model of corporate governance will need to rapidly move from “market-first” to “security-aware,” if not, in some sectors, explicitly “security-first.”
For large multinational corporations operating across jurisdictions, governance structures and oversight models will require meaningful redesign. The relationship between parent and subsidiary boards is likely to come under strain, necessitating a rebalancing of decision-making authority. Boards will need to reassess location strategy in light of political risk, compliance burdens and their embedded costs, the permanence of trade policy as a cost of doing business, mechanisms for moving capital across jurisdictions amid sanctions and restrictions and the viability of alternative payment systems and settlement rails. Some decisions will be best made by subsidiary boards, and others will remain with the primary board. In practice, this means some decisions will migrate closer to local markets, while others remain centralized, creating a more dynamic and, at times, contested governance model.
For smaller corporations and traders, supply chain disruption may be existential. Business economics can change based on rapid volatility in energy prices, raw materials, tariffs and sanctions. Where such firms have boards, directors may need to engage more directly in operational realities than traditional norms would suggest, blurring the line between oversight and active strategic participation.
Regardless of company size, board composition will need to evolve. Directors must be geo-literate: capable of monitoring geopolitical developments, interpreting geoeconomic signals and preparing for sustained periods of strategic friction between major powers. In aggregate, these shifts will catalyze changes in governance practice, oversight and decision-making. Cognitive flexibility, paired with informed judgment, will become a vital cornerstone of effective boards in this environment.
The board’s responsibility is to ensure long-term stewardship of capital and resources. When States are changing the rules of the game, strategy-setting must get comfortable with much larger power plays beyond the bounds of the corporation itself.
The board’s responsibility remains the long-term stewardship of capital and resources. But when states are actively rewriting the rules of the game, strategy-setting must contend with forces well beyond the firm’s immediate control. In this environment, boards cannot rely on unexamined assumptions or narrow perspectives. Nor can they simply align with the dominant power center of the moment—that may prove neither durable nor scalable. Strategic clarity and operational flexibility are now foundational to the board agenda. Paradoxically, periods of instability often offer the best conditions for building institutional resilience and long-term capability.
Some strategic choices will necessarily be short-term, reflecting the fluid nature of international relationships. Constraints will emerge, but then again, so will opportunities. For example, JPMorgan has launched a 10-year security and resilience initiative aimed at mobilizing $1.5 trillion for companies in Europe and the U.K. across sectors deemed critical to national security, including energy, infrastructure, quantum computing and A.I. This indicates a broader alignment of capital allocation with geopolitical priorities.
Media narratives may often shape perception, but deeper data can tell a more nuanced story. While some energy transactions may be settling in yuan and the U.S. dollar’s share of global reserves has declined from 71 percent to 59 percent since the 1990s, capital flows into U.S. equities over the past 15 years mean that half of global stock market wealth remains tied to U.S. markets. Boards must learn to navigate these apparent contradictions, recognizing both diversification trends and enduring structural strengths.
At a recent private markets conference in London, a leading American private equity partner and investor in the energy transition remarked that he has never felt better as an investor, as the market feels “more rational.” Global energy transition investment totaled $2.3 trillion in 2025. In 2026, it has continued to accelerate as the conflict in West Asia encourages reduced reliance on petrol and diesel, and the growth of electrification.
Electric vehicles, with fewer moving parts than internal combustion engine vehicles, may play a role in reshaping manufacturing strategies, particularly in the context of “friend-shoring,” “near-shoring” and onshoring. Yet execution risk remains significant, often less about capital availability and more about infrastructure readiness, such as grid capacity. Delays in these systems can cascade, affecting timelines and returns across entire investment theses. Regardless of ideological stance, boards must engage with realpolitik in a nuanced way, identifying both risks and emerging opportunities as they crystallize.
The final word
Governance is a contact sport. Boards and business leaders running a marathon made up of several relay races, and the current phase is defined by industrial statecraft, competing spheres of influence and shifting power dynamics.
Amid rapid change, the core role of the boards stays the same: to make choices. Free markets have always been about the freedom to choose, within limits. Today, those limits are simply being defined by the state. How organizations play within them, and where they choose to push against them, will define the next era of corporate performance.
Shefaly Yogendra, PhD, is an experienced independent board director and board adviser, with strong expertise and rich experience in geopolitics and technology. Her book “Uncharted Spaces. Reset the Agenda. Reimagine the Boardroom.” is out now.
