Introduce Chief Political Officers in corporate world

In this geopolitical landscape, the role of the traditional Chief Executive Officer (CEO), who primarily focuses on balancing the needs of employees, suppliers, and shareholders, has become inadequate for leading large multinational corporations (MNCs). Therefore, it has become imperative for every corporation to appoint a Chief Political Officer (CPO).

In his renowned book Politics, the great Greek philosopher Aristotle famously declared, "Politics is everywhere."This statement holds even greater relevance in the context of running a big business that operates across the borders. The deteriorating political relationships between the Western world and China are significantly impacting their business interest.

 For instance, Western companies are relocating to neighbouring countries such as Vietnam or Hong Kong, while the China is turning to Morocco as a popular alternative.
The war in Ukraine, Palestine,supply chain disruption by Brexit, Covid-19, extreme weather events, and the rapid technological revolution have collectively made corporations more vulnerable to political instability today than at any point in recent memory.

In this geopolitical landscape, the role of the traditional Chief Executive Officer (CEO), who primarily focuses on balancing the needs of employees, suppliers, and shareholders, has become inadequate for leading large multinational corporations (MNCs). Therefore, it has become imperative for every corporation to appoint a Chief Political Officer (CPO).

This individual will be equipped with political training, expertise in public relations, communication, and government affairs. 'A technocrat who comprehends how to navigate corporate interests amidstpolitical volatility,' as described by Camilla Cavendish, a senior fellow at Harvard university.

While it may be considered a relatively recent development, one could argue that the role of the CPO has deep historical roots. In his book - Empire, Incorporated - Philip Stern argues that it was not British monarchs, politicians, or armed forces but Lord Clive, who served as the CPO of the East India Company (EIC), that played a pivotal role not only in positioning the EIC as one of the world's foremost capitalist entities but also in establishing the British empire in India in the 18thcentury.

Moreover, political victory of Robert Clive at the Battle of Plassey in 1757 enabled the EIC to control Bengal, then the wealthiest region in the world. As historians William Dalrymple and Jon Wilson have noted, the subsequent Bengal famine was a tragic consequence of exploitation, mismanagement, and EIC greed under Clive's leadership.

The connectionbetween corporations and politics is not onlywell-established but theformer can also influence the latter.Historical examples include the Anglo-Persian Oil Company's involvement in the downfall of the the Iranian governmentand United Fruit'sin Guatemala during the 1950s. In the 1970s, ITT lobbied for the removal of to Salvador Allende in Chile. More recently, ExxonMobil has exerted pressure on the United States to safeguard its interests in countries like Indonesia, Iraq and Afghanistan.

Additionally, the growing size of MNCs also carries political implications. According to one estimate, 69 of the top 100 wealthiest economic entities, in 2017, were corporations, not countries.

Companies' fortunes, too, are increasingly entwined withpolitics. Both Apple and Huaweihave borne the brunt of the ongoing Sino-American tech war. Apple's value plummeted by 6 percent, equivalent to $200 billion, when China orderedgovernment employees not to usethe upcoming iPhone15. Conversely, US export restrictions dealt a significant blow to the Chinese tech giant,Huawei. The Ukraine war has left billions of dollars in Western corporate profits stranded in Russia.

The primary role of a CPO is to foresee and then safeguard their respective corporation from such geopolitical challenges. They mustpossess insight into the impact, for example, ofChina's much-talked-about potential invasion of Taiwan, as the latter produces 90 percent of the world's advanced semi conductor technology.Furthermore, chief political officer, should have a deepunderstanding of theimplications of the Biden administration's energy and chips legislation, which is forcing companies to respond.

A savvy chief political officer with strong public relations skills can significantly enhance a company's profitability. According to reports fromHindenburg Research and the Financial Times, Gautam Adani of theAdani Group,who allegedly acted as a CPO,influencedIndia's Prime Minister Narendra Modito exert pressure on the governments of Bangladesh and Sri Lanka, leading to the acquisition ofmulti-billion-dollar business deals. These reports also reveal that Modi negotiated with the government of Israel to establish lucrative business contractswith the Adani Group.

In response to the challenges posed by geopolitical uncertainty, KPMG International Ltd, one of the BigFour accounting firms,conducted an exclusive study titled'The CEO as Chief Geopolitical Officer.' The study advocates three proactive measures:

Firstly, appoint a Chief Geopolitical Officer who is responsiblefor managing the impact of politics on the company's business interests.

Secondly, recognising that the MNC's pubic relations department cannot influence real change, the CPOwouldwork closely with the government's public affairs teams.

Thirdly, implement a robust geopolitical forecasting and monitoring system.Instead of relying solely on mass media sources,companies should invest in specialised research-orientedintelligence when dealing with geopolitical

Navigating throughthe rough seas of international politics, the chief political officer and corporate management teammust grapple with the following critical questions:  

*    Have your financial forecasts and business plans been stress-tested for geopolitical disruptions?
*    What does an increase in geopolitical uncertainty mean for the availability and cost of capital and resources?
*    How resilient is your business to the loss of a key customer as a result of a geopolitical event?
*    How could your distribution network or product portfolio be impacted by major geopolitical changes?
*    Which new or alternative markets should be explored in light of possible political trajectories?
*    Who in the business is responsible for monitoring, analysing and interpreting geopolitical events?
*    Is your operating model sufficiently agile to respond to a surprise geopolitical event?

The increasing complexities of international politics present significant challenges for global corporations. Nevertheless, those that are well-prepared and equipped with a carefully devised strategy, can successfully leadtheir companiesprofitably across borders.Hence, multinational corporationsmust appointtheir own 'general' - the Chief Political Officer.

The writer is a freelance columnist specialising in current affairs and development issues.