Nationality Exposure: The new geography of corporate risk. 

By Gareth Morgan – Executive Director

The world has experienced extraordinary geopolitical upheaval over the past two years.

War in Europe and the Middle East. A dramatic change in America’s relationship with its allies. Growing tensions with China. Trade wars and tariffs. The return of economic nationalism. Increasing concern about sovereignty in everything from defence and energy to technology and data.

And there is little to suggest any of it is slowing down.

For businesses, geopolitics has traditionally been something happening around them.

It affected supply chains, market access, regulation and investment decisions.

But increasingly, we think something more fundamental is happening.

Geopolitics is becoming part of corporate reputation.

We first started thinking about this after two conversations.

The first was with a client facing consumer boycotts. The issue wasn’t anything the company had done. It wasn’t a product failure or a reputational crisis. It was simply where consumers believed the company came from.

A few weeks later, we met another business trying to win government contracts internationally. They told us one of their biggest obstacles wasn’t capability, price or technology. Again, it was their nationality.

Those conversations made us wonder whether businesses were increasingly being judged not only by what they do, but by where they are perceived to come from.

So at Cavendish, we decided to find out.

We commissioned original research among both the British public and Members of Parliament.

The results were striking.

Russia, unsurprisingly, was considered the greatest nationality risk. But 37% of the British public identified China as a risk to the UK’s national interest, and 31% said the same of the United States.

31% said they were less likely to buy from US-based organisations, while 41% were more likely to buy from organisations based in the European Union.

And 85% of MPs supported greater scrutiny of foreign companies bidding for UK public contracts.

One finding particularly stood out.

Among younger people, the United States is now viewed more negatively than China as a threat to the UK’s national interest.

That would have been almost unimaginable only a few years ago.

But this isn’t simply a story about American companies.

It points towards something much bigger.

We call it Nationality Exposure: the extent to which a company’s country of origin or geopolitical associations shape stakeholder perceptions and, increasingly, commercial outcomes.

And every multinational organisation has it.

For some, nationality can be an advantage. European provenance, for example, currently carries positive associations with significant parts of the British public.

For others, geopolitical events thousands of miles away can suddenly create reputational or commercial risks over which the organisation itself has almost no control.

And those effects aren’t uniform.

Nationality can matter differently to a consumer deciding what to buy, a politician considering a public contract, a government thinking about sovereign capability, or a community deciding whether to welcome an investment.

It can also matter differently depending on the sector.

In defence, nationality becomes entwined with sovereignty and national security.

In technology, it raises questions about data, infrastructure and dependence.

In healthcare, trust, supply chains and domestic capability can become important.

The encouraging finding from our research is that Nationality Exposure isn’t fixed.

Companies can mitigate it.

Visible investment in the UK matters. So do jobs, local leadership, partnerships, manufacturing, paying taxes and demonstrating a long-term commitment to the country and communities in which a business operates.

But the first step is recognising that the risk exists.

Because the geopolitical environment in which companies operate has changed remarkably quickly.

The assumptions businesses made about nationality, globalisation and corporate reputation even five years ago may no longer hold.

In an increasingly contested world, where a company comes from – or where people think it comes from – is becoming part of how that company is judged.

Download our Nationality Exposure report here.