Geopolitical risk needs to move away from the ‘after-dinner speaker’: Eurasia Group and Rio Tinto’s Dominic Barton

Geopolitical risks have become increasingly prominent for CEOs, with the list of potential shocks expanding rapidly. Dominic Barton, strategic counselor to Eurasia Group and chair of Rio Tinto, emphasized that the traditional assumptions of international institutions and free trade are no longer reliable. Barton, a former McKinsey leader and Canadian diplomat, sees a significant increase in geopolitical risk but also potential upside.

He criticized the notion of treating geopolitical risk as an after-dinner speaker topic, stating that CEOs must integrate it into their core business strategies. Barton advised CEOs to spend more time engaging with governments and improving government relations, citing examples such as Temasek CEO Dilhan Pillay Sandrasegara, Apple's Tim Cook, and Tesla's Elon Musk.

He emphasized the importance of understanding foreign governments' perspectives and operational security. Barton also discussed Rio Tinto's changing strategies due to China's growing influence as a technological powerhouse. While acknowledging China's competitive edge, Barton noted that the company has increased its purchases from China, despite higher costs, due to better quality and durability.