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BGS In The News – CEOs Seek Their Own State Departments

BGS In The News – CEOs Seek Their Own State Departments

Washington, DC – March 16, 2022

Hans Nichols, author of Axios Sneak Peek

Russia’s invasion of Ukraine is prompting American CEOs anew to build their own mini-State Departments as they navigate the uncertainties of a war and world increasingly unbound by norms and institutions.

Why it matters: Executives traditionally rise to power by creating successful products and business lines, managing expectations and turning profits — not mastering foreign policy. With little margin for error, many are turning to D.C. experts with heightened urgency.

What we’re hearing: “Every CEO of a global business today has to make sure they have a real plan for geopolitical disruption,” said Robert Gibbs, former President Obama’s first White House press secretary.

By the numbers: Nearly 400 companies have announced their intent to withdraw from Russia since President Vladimir Putin invaded Ukraine, according to a list compiled by Jeffrey Sonnenfeld, a professor at the Yale School of Management.

Between the lines: Corporate concern about world affairs isn’t completely new — especially in the financial services sector, which relies on global markets.

Be smart: Just as the protests after George Floyd’s murder forced companies to review their posture on social issues, the invasion of Ukraine is putting a new batch of CEOs on notice.

Each new round of international sanctions or Russian strikes on civilians or near a NATO border is forcing companies to analyze their exposure.

How it works: Most companies are turning to outside consultancies, stocked with former congressional, administration and defense officials to help them weigh risks and consider safer options.

Between the lines: Defense contractors and companies that already do business with foreign governments have a head start.

The bottom line: Companies would rather react to clear government regulations than try to divine the shifting motives of politicians — especially the actions of authoritarian leaders like those in Moscow and Beijing.

Read on Axios