Why Political, Regulatory and Geopolitical Risk Should Be on Every Business Leader’s Agenda

The 2026 midterm elections are still months away, but for business owners, executives, investors and directors, the time to prepare is now.

Many businesses will wait until after Election Day to assess what has changed. Forward-looking organizations will already have identified their vulnerabilities, considered multiple outcomes and developed plans to respond.

Political, regulatory and geopolitical risk is no longer a concern only for large corporations with government affairs departments. It affects businesses of every size.

Tariffs and energy prices can alter a manufacturer’s costs. Changes in tax, labor or permitting rules can affect a family-owned company. Technology businesses must navigate evolving requirements involving artificial intelligence, cybersecurity and data privacy. Retailers, healthcare providers, contractors and logistics companies can all be affected by decisions made far beyond their immediate markets.

Businesses routinely prepare for financial volatility, severe weather, cyberattacks and supply chain interruptions. Political and regulatory uncertainty deserves similar attention.

During my career in federal and state government and in advising businesses and investors on public policy and regulatory strategy, I have seen that organizations that anticipate change are usually better positioned than those forced to react after it occurs.

The objective is not to predict the election. It is to understand how different outcomes could affect the business.

History shows that the president’s party often faces difficulties in midterm elections. Whether that pattern holds in 2026 remains uncertain. What is clear is that the election will occur amid a complicated domestic and international environment.

Conflict in the Middle East may affect energy markets, inflation, commodity prices, trade and supply chains. Strategic competition with China continues to shape tariffs, technology policy, investment and national security. At home, polarization remains intense, and movements on both the left and the right are exerting greater influence over economic policy.

Progressive and democratic socialist leaders are advancing proposals involving taxation, labor, housing, energy and the role of business in some jurisdictions. Populist forces on the right are reshaping debates over tariffs, immigration, trade and the relationship between government and the private sector.

Business leaders do not have to support these movements to recognize their potential consequences.

This is not about choosing between Republicans and Democrats. It is about understanding how government action and geopolitical developments can alter costs, markets and competitive conditions with remarkable speed.

Georgia businesses have particular reason to pay attention.

Our state has earned a strong reputation as a place to start, invest in and grow a business. Its infrastructure, workforce and business climate have attracted major employers while supporting the small and midsize companies that form the backbone of the economy.

But operating in Georgia does not insulate a business from decisions made elsewhere. A company may depend on imported materials, out-of-state customers, federal funding, government permits or suppliers exposed to international conflict. A change in Washington, another state capital or a foreign government can quickly affect its plans.

Small and midsize businesses may be especially vulnerable because they often have less capacity to absorb unexpected costs or assign employees solely to monitor government activity.

Businesses must also look beyond Congress. Governors, legislatures, attorneys general, regulatory agencies and local governments are increasingly shaping policy involving labor, licensing, energy, healthcare, housing, transportation, taxes and consumer protection.

For companies operating across multiple jurisdictions, inconsistent laws can increase costs and complicate decisions about hiring, investment, products and expansion.

The most useful question, therefore, is not simply who will win. It is how the business would operate under several plausible outcomes.

Every organization—whether publicly traded, privately held, family-owned or newly established—should consider conducting a Political Risk Readiness Assessment.

The exercise need not be complicated. It should identify the external developments most likely to affect the business, estimate their potential impact and establish practical responses.

Business leaders should consider:

• Could changes in taxes, tariffs or regulation affect our costs, pricing or investment plans?

• Do we depend on licenses, permits, government contracts or economic development incentives?

• Could new employment requirements affect our workforce?

• Are critical suppliers exposed to conflict, trade restrictions or political instability?

• Which policy developments could create opportunities as well as risks?

• Who is responsible for monitoring these issues and coordinating a response?

The analysis should translate public policy into business consequences.

Would a tariff require a pricing change? Could a new labor rule alter hiring plans? Might conflicting state regulations require changes to a product? Could a funding decision affect a significant customer? Would a disruption require the company to find another supplier?

The result should be a manageable set of scenarios, assigned responsibilities and contingency plans—not a collection of political headlines.

Large organizations may involve executive teams, legal departments, government affairs professionals and boards. Smaller businesses may rely on an owner, chief financial officer, outside counsel, industry association or trusted adviser. The process will differ, but the need to understand material external risks does not.

Political risk planning also does not require a business to become partisan or weigh in on every controversy. Its purpose is to evaluate how different policies and events could affect employees, customers, costs and growth.

Businesses do not prepare for cyberattacks because they can predict when one will occur. They prepare because the potential damage is too serious to ignore. Political, regulatory and geopolitical risks should be approached with the same discipline.

No one can know precisely how the midterms will unfold, which regulatory proposals will advance or how international conflicts will evolve. Businesses do not need certainty, however, to become more resilient.

The organizations best positioned after the election will not necessarily be those that correctly predicted the winners. They will be those that identified their exposure, challenged their assumptions and prepared for more than one possible future.

Political, regulatory and geopolitical uncertainty is now a permanent feature of the business environment. Managing it is not merely a concern for Washington lobbyists, Fortune 500 corporations or corporate boards.

It is a responsibility for every business leader.

The midterms are coming.

The better question is whether your business will be ready

Eric Tanenblatt is the Global Chair of Public Policy & Regulation at Dentons, the world’s largest law firm.   He has served in three US presidential administrations and as chief of staff to Governor Sonny Perdue and as a senior advisor to U.S. Senator Paul Coverdell.  He is a longtime business and civic leader serving on the boards of the Georgia Chamber, the Metro Atlanta Chamber, the Buckhead Coalition and Points of Light.