EisnerAmper LLP and the National Association of Corporate Directors hosted a roundtable event earlier this month on the future of risk. After discussing what social media and artificial intelligence portend for business—and how directors can oversee those issue—Peter Bible, partner and chief risk officer at EisnerAmper, led a conversation on geopolitical risk.

Peter Bible, standing, discusses geopolitical risk.

“I put the future of risk in two buckets,” Bible said. “First, there are black swans. They are things that are embedded [in the business environment and society at large], and when they come to light they are so disruptive they are devastating. Brexit was embedded in the way people felt in the United Kingdom. Our own election was an upheaval of sentiment. The other thing is the butterfly effect where some movement somewhere around the world can disrupt what you’re doing. That’s how you have to think about geopolitical risk.”

Here, strategy and risk oversight can enable a company to better weather disruptions that arise from changes in a country’s leadership or regulatory agenda. As one director observed, part of the trick is to be able to look out on the horizon, realizing that it’s impossible to have the foresight to identify every disruptor that can threaten the business.

“Get to know the business unit heads,” one participant suggested. “It gives you a feel for what they think the strategic risks and opportunities are—it changes how the board is reacting to strategy and risk.”

“When we first approached enterprise risk management,” another participant offered, “the whole board owned risk management and we reached to an outside firm for help. When the firm interviewed management and the board, the risk factors each group identified didn’t match up. People view the world from where they sit. So, we sat down with management and developed a top ten list that we could all bite into. Reconcile the risks as best you can and figure out how to move forward.”

Lacking a well-rounded worldview can be especially damaging for multinational companies, which need to consider risks that are unique to each country in which they operate. “I think we in the United States don’t take time to understand how different countries operate both as a country and as a culture,” one director remarked. “Think about benefits for employees. Most of those countries have national healthcare, so automatically you have a different cost structure of how your business looks in that country. And that can either lower or raise your company’s risk profile. As you get into other parts of the world, the nuances are very different and sometimes we think the rest of the world operates as we do. That’s a part that we as a culture need to understand. Think global act local needs to be implemented more in corporate strategies.”

Bible then refocused the conversation to focus on how the current regulatory environment stands to create both risks and opportunities. “There is a deregulation movement underway and many businesses are hurt by this because they make their money based on current regulations. If 75 percent of the regulations that are currently on the books are going to come off, what does that do to your business model? What regulations do you depend on for progress?”

One participant brought up Uber Technologies as an ideal case in point. The taxi industry is heavily regulated; however, Uber is allowed to follow its own set of rules. Another participant observed that having a Federal Communications Commission chair with an anticompetitive stance is going to be highly disruptive for telecommunications companies. For example, some critics argue that removing some net neutrality protections will lead to companies having to pay fees to broadband providers for faster download speeds to ensure that their goods and services can easily reach consumers. This could be especially detrimental to startup telecommunications companies and smaller Internet service providers which don’t have the financial resources of larger, more established companies.

While regulation compliance can be expensive and time consuming, one attendee noted that not all regulations are bad. “Identify which regulations benefit you and your competitors; it’s a good inventory to have,” Bible said in closing. “A lot of things are on the table right now and the potential to have your business hurt by deregulation is definitely there.

Click here for highlights from the portion of this roundtable discussion that focused on the business implications of social media and artificial intelligence.