Globalisation is over,” proclaimed many headlines after the Brexit and Trump victories in 2016. People have been sounding the death knell for global growth for several years. The trends behind this are undeniable. There has been a strong populist movement in many regions against globalism and its perceived association with job loss and security threats. The overall trade in goods has flattened since the onset of the global financial crisis nearly 10 years ago. And the likely renegotiations around NAFTA and inevitable move to Brexit will have further impact on regional and global trade.

But for companies, these developments require not a turning away from globalism, but rather a shift in thinking about how one responds to events and prepares for the risks ahead. Instead of a time for contraction of business and markets and capital flows, we are entering a new phase of global business, and boards must think expansively but thoughtfully about where their companies are headed.

The past few years have generally been good ones for US business, but companies can no longer sit back and eye new markets and investments on autopilot. The new globalism means a greater responsibility for directors, who must push management to address key issues from trade to regulation to talent. There is much that is still uncertain about the new administration’s policies and how much they will indeed change the business landscape, but boards must bring to their agenda these issues that define the new global era.

The rapid pace of cross-border trade growth seen in the 90s and 2000s has indeed slowed since the global financial crisis. Several structural factors (e.g., the slowing of cross-country supply chain formation) and cyclical factors (including a weakening of demand) have, according to the Federal Reserve, reset the lower level of global trade to a “new normal”.

Apr-Jun 2017 Issue

WomenCorporateDirectors Foundation (WCD)