Board Focus: Are CEOs and Boards 'Risk Ready'?

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You wouldn't be alone if the news in Iran has kept you up at night—or at least caused more doomscrolling than usual. But if you’re thinking that leaders have a better handle on the risks such events have on their companies, think again.

Among all the major risks they face, CEOs and directors say they’re least confident about their firms' ability to manage geopolitical risk, according to a soon-to-be-released Korn Ferry survey on global risk. Just 21% said they were “extremely” or “very” confident; less than half were “moderately” confident. That’s less confidence than they report having in their capacity to handle economic volatility or the emergence of artificial intelligence. It’s half the level of confidence they say they have in dealing with today’s talent loss and skills shortage—which firms have cited as a critical issue.

“Geopolitical risk is externally driven and largely uncontrollable, making it far less predictable than internal disruptions, which leaders feel they can model, hedge, or adapt to,” says Alan Guarino, a Korn Ferry vice chairman. “Leaders can’t forecast or influence it easily.”

The Korn Ferry report surveyed 250 CEOs and board members at leading firms in seven major industries across the globe. It focused on risk management, which has become a hot-button topic in a world in which so many so-called Black Swan events and disruptions are happening at once. In the past 12 months alone, some 63% of respondents said their firm’s risk exposure had increased—making it all the more important to prepare leaders for whatever may be thrown their way. “When you think about developing leaders, you need more optionality,” says Tierney Remick, vice chairman and co-leader of Korn Ferry’s Board and CEO Services practice. “It’s about preparing enough in advance not just for one business scenario, but for multiple scenarios.”

In recent years, of course, leaders have faced other events that posed enormous risks to their firms’ operational and financial futures, from the financial crisis of 2008 to the COVID-19 pandemic. But the ranks of experienced top leadership have been thinned by last year’s record turnover of CEOs, along with the retirements of directors. “Many leaders today are not battle-tested,” says Guarino. “Awareness is heightened but preparedness is not. New CEOS may be strong operators,” he adds, “but lack geopolitical muscle.”

The survey found that confidence related to geopolitical risk was lower in the US (19% of respondents were "extremely or very" confident, versus 30% for the rest of the world). From the perspective of the Middle East, concrete responses to the Iran conflict are still developing, says Lucy Phillips, a Korn Ferry project manager based in the United Arab Emirates. "Given how recently these geopolitical developments have occurred, the specific impact on business in the Middle East remains unclear," she says.

If the latest geopolitical risk to hit leaders has a silver lining, it may be that many of them—64%—have been immersed in intense scenario planning since the onset of the 2025 tariffs. This could prove helpful to leaders around the world if the Iran conflict escalates. “Scenario planning can help build confidence in the leadership team,” says Tamara Rodman, a Korn Ferry senior client partner in the firm’s Culture, Change, and Communications practice.

It’s not a bad idea for companies to appoint a geopolitical risk officer or advisor, experts say—someone CEOs and boards can call on in crises, as they’ve historically done during cybersecurity incidents, for example. And even if boards formally meet only once quarterly (as is the case for 43% of respondents in the Korn Ferry survey), timely updates—at least once monthly in volatile regions—are key to keeping directors in the loop. Some companies could even set up geo-risk dashboards that incorporate real-time intelligence, so the C-suite and boards regularly receive summaries. “Dashboards, watch lists, or executive summaries should flow more regularly to the board,” says Guarino.

Find out more about how boards and leaders are handling today’s volatility by exploring our leadership topics hub.

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