IoD and Keizai Doyukai leaders navigate global business challenges
In a collaborative effort to address the evolving landscape of global business amid geopolitical challenges, prominent business leaders from the UK and Japan representing the Institute of Directors (IoD) and Keizai Doyukai (Japanese Association for Corporate Executives) engaged in a high-level dialogue discussing critical issues impacting international trade and investment, and its impact on boardroom priorities.
Dr Indranil Nath, Fellow and Chair of IoD Japan Group and Mr Osamu Mogi, Chair of the Keizai Doyukai International Affairs Committee, chaired a roundtable discussion. The business leaders debated concerns and strategies being employed by boards in navigating geopolitical risks, energy and supply challenges, business resilience and risk management and finally, the ESG acceleration and global business, highlighting the pressing concerns and potential opportunities.
Opening the discussion on the overall economy and the sentiments of the membership, IoD Chief Economist Kitty Ussher presented insights on the UK economic situation and challenges based on IoD surveys, discussing a flat GDP, low consumer confidence and potential recession predictions. The business leaders pointed out that the UK and Japan faced challenges in diversifying their energy sources. Geopolitical and economic issues addressed included Russia’s diversification in terms of energy, difficulties in supply chain diversification from China, concerns about the safety of employees in China and Taiwan and the impact of the Russia-Ukraine conflict on different industries.
The participants acknowledged that the UK faced challenges in diversifying from Russia regarding energy, as does Japan in diversifying its supply chain away from China. Business leaders mentioned that it was essential to distinguish between politics and business, creating more options and delaying decisions. However, there were rising concerns about the safety of employees in China and Taiwan as well as the reliance on UK and US intelligence for employee protection. For example, the high-tech industry felt it would be naïve to think of completely decoupling from China in the semiconductor supply chain. Instead, the business needs to create options before making decisions.
Participating leaders from the energy sector also discussed the issues related to aircraft leasing, the impact of energy policies in Europe (especially in Germany) and the need to reconsider the role of coal in power generation. Reputation was considered a significant factor in business and investment decisions in boardrooms. Discussing the geopolitical standing, business leaders were unclear how the UK, Japan and Europe would react if China invaded Taiwan. It was unclear if the West would enforce strict sanctions against China and the business implications were uncertain. On the other hand, business leaders did mention China’s success.
They questioned if democratic countries should be partnering with authoritarian nations and if the nature of governance impacts business and competitiveness. The leaders noted how consumer and employee activism influenced business decisions, particularly regarding investments and operations in geopolitically sensitive regions. In this context, business leaders emphasised the need to create diverse options while delaying some decisions in unpredictable political landscapes.
Amid the varied challenges, the business leaders recognised the need for an accelerating shift towards environmental, social and governance considerations. The leaders acknowledged the importance of green investments and continued focus on ESG factors. The business leaders from both the UK and Japan highlighted the need for businesses to explore opportunities in dynamic markets beyond China and Russia, focusing on South East and South Asia.
The path to enhanced awareness and maturity
While awareness of these critical issues had increased, there was a collective acknowledgement that maturity in addressing them needs enhancement. The ongoing geopolitical landscape necessitates continuous dialogue and proactive measures. Boards are urged to elevate their understanding and preparedness to effectively manage geopolitical risks in an ever-changing business environment. The discussion reflected the commitment of business leaders to adapt and fortify their organisations against the challenges posed by geopolitical uncertainties. The overall tone suggested recognising challenges, a focus on adaptability and the importance of continued collaboration and dialogue between business leaders from the two nations.
Closing thoughts and future outlook
The business leaders concluded that both the UK and Japan needed to continue the dialogue, recognising the challenges ahead, the adaptability required in the face of a shifting global landscape and the crucial role of leadership in navigating the complexities of international business.
In their closing comments, both chairs of IoD Japan Group and Keizai Doyukai International Affairs Committee applauded the collaborative effort between the institutions, exemplifying the commitment to fostering understanding, sharing insights and collectively addressing the challenges and opportunities that lie ahead in the global business arena.
Authors: Dr Indranil Nath and Dr Yildiz Kara members of the IoD Japan Group research team.
The debate took place on 22 August 2022, London.
This is a guest blog which contains the views of the author and does not necessarily represent the views of the IoD.
About the author
Dr Indranil Nath is an entrepreneurial and globally exposed leader, board member, and iNED with years of experience in insurance operations and technology across Build, Sell and Delivery Organisations. Dr Nath held a series of positions with increasing responsibility at DXC, IBM Corp, AXA and EY and currently delivers consulting to Private Equity firms on projects focusing on product development, acquisition and value creation opportunities in insurance software. Technology Inclusion Council has awarded him the ‘2021 Top 100 Diverse Leaders in Tech’. He is an Honorary Senior Fellow at the School of Science & Technology, City University of London, a Chartered Engineer, a Chartered Fellow of BCS, The Chartered Institute for IT, and a Fellow of the Institute of Directors, where he chairs the Japan Business Group.
