In your forthcoming book, you describe the future as “unruly.” What are the implications for global businesses?

The world is unruly in two ways. First, there is dramatic volatility—politics, technology and the law are all changing in seismic, unpredictable ways. Second, the world is literally “unruling”—rolling back the rules and norms of globalization despite the fact that the world remains globalized. This creates very specific risks for businesses.  

My core framework is the Unruly Triangle, which posits that politics, law and technology exist in dynamic flux with each other, and we are exposed to Geolegal Risk from the intersection of politics and law; Artificial Politics Risk from the intersection of politics and technology; and LegalAI Risk from the intersection of law and AI. Leaders will be wrong-footed if they fight politics with politics, law with law and technology with technology—they need integrated strategies for these synthetic risks.

As a global business, should we invest in anticipating policy shifts or focus on faster reactions with response plans and contingencies?

It’s very hard to anticipate what’s going to happen next. I spent my career as a forecaster, and even when the world was largely going in the same direction—toward convergence—it was still hard to be right more than 70% of the time. That doesn’t mean you don’t monitor and prepare; it just means you have to get ready for more scenarios than in the past. You can’t focus on a base case.

The knee-jerk response of many corporate analysts is to prescribe “resilience”; for instance, if your supply chain depends on South Korea, you should have an alternative plan in the event North Korea attacks. That’s important.

But it betrays the fact that the risks we are facing are novel. How do you develop resilience against deepfake attempts to defraud you? Against governments targeting your company for providing support to your home government, which is at war with them? Against the novel risk of thousands of disputes filed against your company through automated means? Against all of these at the same time?

These are new challenges, and there’s no “resilience button.” Rather, creating a flywheel where politics, law and technology reinforce each other in support of your business gives you enduring resilience.

Microsoft is a great example of what I call the Unruly Flywheel. 20 years ago, Microsoft had all sorts of political and legal trouble. But today it’s positioned as a national champion, able to muster political clout and soften legal impetus for antitrust and the like precisely because it’s technological advances are viewed as critical to US power. Getting politics, law and technology to self-reinforce creates competitive advantage.

As investors, how can we assess a target company’s readiness for an unruly world?

If only more investors asked this question!  

First, you need to understand the geographic exposure of the company.

• Are they in a stable region with rule of law?
• Are the courts becoming politicized?

Second, you need to understand the company's industry exposure.

• Is the industry stable?
• Is technology going to beget a cycle of regulatory scrutiny that ultimately means the government is determining winners and losers?
• Are there state-owned competitors attempting to win?

Third, you need to understand the human capital of the company.

• Does it have leaders who have thrived in turmoil?
• Does it have a “knowledge supply chain” of advisors who can help it navigate twists and turns with dynamic outcomes?

This takes the idea of due diligence to another level—on some level, you need to spend as much time investigating the legal and political position of the company as you do the financial and technological. That’s a change.

In an unruly world, how must the legal function adapt?

The demands on the legal function change a lot. Legal winds up increasingly in the lead on political events (or it should be). Government affairs functions don’t always need to report to the GC or CLO, but there are big advantages in today’s world if they do.

1. First, politics has gone wild on a domestic level in big markets like the US, and the courts will be more effective than lobbying at slowing down or mitigating change.
2. Second, to the extent you attempt to influence personalistic leaders like US President Donald Trump, you want the legal team co-signing your approach so you don’t get too close to real or perceived corruption.
3. Third, with new technology, the legal team is often deciding what’s acceptable and what’s not because the regulatory environment is unclear.
4. Fourth, political imperatives in different jurisdictions will lead to overlapping legal exposures. Is it possible to comply with the US retreat from ESG and the EU’s march forward on it? You need good legal advice on how to do so in a way that is integrated with your political strategy.

As a result of all of this, the Chief Legal Officer and the General Counsel should expect to be in front of the board, giving voice to the company’s strategies, and need to be in lockstep with government affairs to do so.

In an unruly world, how will approaches to compliance change?

I think we’re going to see an onslaught of rule-breaking—and of pressure for compliance-focused companies to loosen up in order to compete with rule breakers.

The rules of the game are no longer clear, creating the gray area and plausible deniability that move-fast-and-break-things companies thrive on to justify taking risks. Government cannot afford to keep up with new technologies, so companies break the rules and assume they can pay the costs later. If you don’t do that, you will ultimately be left behind.

To be clear, in some jurisdictions, normal politics hold, and companies will be both cooperative and compliant. But what’s changing is the number of places where the politics of compliance has become unruly.

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Sean West is the co-founder of Hence Technologies and the author of Unruly: Fighting Back When Politics, AI, and Law Upend the Rules of Business, elements of which are excerpted above. He also writes the weekly newsletter Geolegal Notes, available at geolegal.substack.com. Hence Technologies builds software to solve geopolitical and legal risk—read more at hence.ai/geolegal.