Why SEA’s Geopolitical Premium Demands a Whole New Class of CFO

For years, finance leaders across Southeast Asia operated in an environment largely shaped by economic cycles, market demand, and cost efficiency.

That assumption is changing fast.

According to ACCA’s latest Global Economic Conditions Survey (GECS), geopolitical instability has now overtaken economic concerns as the top risk priority for finance professionals globally — with concern levels even higher across Asia Pacific.

For Sharath Martin, Senior Policy & Insights Consultant at ACCA Asia Pacific, this shift is not theoretical.

After more than 25 years working across business advisory, listed conglomerates, capital markets regulation, and professional accounting, he believes finance leaders are entering a fundamentally different operating environment — one where geopolitical shocks, technological disruption, energy security, cyber threats, and institutional trust are increasingly interconnected.

And in highly trade-dependent economies like Singapore, that convergence is forcing companies to rethink not just risk management, but the very definition of resilience itself.

Why Geopolitical Risk Has Moved to the Centre of Business Planning

Q: Geopolitical risk has overtaken economic concerns as the top issue for finance professionals globally. How is this changing decision-making for businesses operating in Southeast Asia?

A: The numbers from ACCA’s Global Economic Conditions Survey for Q1 2026 are striking.

Globally, 25% of respondents ranked geopolitical instability as the top business risk. In the Asia Pacific, that rises to 33%.

That regional premium is not accidental.

Southeast Asia sits directly within some of the world’s most critical trade and energy corridors. The Strait of Hormuz, for example, remains central to Asia’s energy imports, which means geopolitical conflict in the Middle East becomes very tangible for businesses here very quickly.

Several economies across the region have already implemented energy conservation and rationing measures for households and businesses. This is no longer a hypothetical risk being modelled in spreadsheets. It is a live operating condition.

What I’m seeing on the ground is a clear shift in business behaviour.

Geopolitical risk is now influencing:

• Where companies invest
• How supply chains are structured
• How much operational buffer do businesses maintain
• How organisations think about long-term commitments

For years, efficiency was the dominant objective.

Now, flexibility is increasingly being treated as a strategic asset — even if it comes at a higher cost.

For economies like Singapore, which built their competitiveness on openness and frictionless global trade, this is a significant recalibration.

Supply chain diversification, once seen as an unnecessary expense, is now viewed as insurance worth paying for.

And importantly, geopolitical risk has moved from the edge of financial planning to the centre of it.

CFOs who still treat these disruptions as annual stress-test scenarios are already behind.

The End of “Separate” Risks

Q: The GECS findings suggest geopolitical, economic, and technological risks are becoming increasingly interconnected. How should finance leaders rethink their role?

A: The old approach to risk management no longer reflects reality.

Traditionally, organisations separated risks into categories:

• economic risk
• cyber risk
• operational risk
• geopolitical risk

Different teams handled different issues.

But the world no longer behaves that way.

A geopolitical conflict now affects:

• energy prices
• currency stability
• logistics reliability
• cybersecurity exposure
• and digital infrastructure resilience

All at once.

The problem with managing risks separately is that it creates the illusion of coverage without truly understanding how these risks interact.

That changes the role of the CFO fundamentally.

Finance leaders sit in a unique position because they already see the organisation horizontally:

• The P&L impact of supply chain disruption
• Balance sheet exposure to currency and credit volatility
• Cash flow implications of operational shocks

That visibility is exactly what integrated risk intelligence requires.

The question now is whether finance functions are being empowered to act on that visibility — or whether they are still confined to reporting and control responsibilities while broader risk governance happens elsewhere.

The finance leaders who will matter most over the next decade are those who can connect non-financial risks to financial outcomes in real time.

That requires a different capability set:

• dynamic scenario modelling
• integrated governance thinking
• faster decision-making structures
• and the ability to navigate ambiguity across functions

The convergence of risks is not just changing risk management.

It is expanding what finance leadership itself needs to become.

Why Efficiency Alone Is No Longer Enough

Q: With rising cost pressures and declining CFO confidence, what practical adjustments are companies making to remain resilient?

A: The cost environment right now is extremely challenging.

According to the GECS data, 69% of global accountants reported increased operating costs in Q1 2026 — close to the highest level recorded since the post-Ukraine invasion period.

For Southeast Asia, energy dependency makes these pressures even more acute.

But I think it’s important not to overstate the negativity.

The data also shows that underlying demand has not collapsed. The Global New Orders Index actually recovered to its historical average after hitting a post-pandemic low in late 2025.

What has changed more sharply is confidence.

And confidence matters because fear itself can become economically damaging if organisations overreact or freeze decision-making entirely.

What I’m seeing instead is a shift toward more disciplined resilience strategies.

Companies are tightening working capital management and reducing tolerance for excess cash tied up in inventory and receivables.

Pricing mechanisms are becoming more dynamic instead of relying on annual review cycles.

Supply chain flexibility is now being prioritised over pure cost optimisation.

The companies performing best today are generally the ones that built buffers before the crisis:

• stronger cash positions
• diversified supplier networks
• operational flexibility
• and better governance discipline

The last decade rewarded extreme efficiency.

This decade is increasingly rewarding resilience.

The Trust Deficit Businesses Can No Longer Ignore

Q: The report also highlights growing concerns around institutional trust. How should organisations strengthen trust in uncertain environments?

A: Trust is often discussed like a soft concept.

It isn’t.

When institutional trust erodes, the cost of doing business rises:

• Contracts become harder to enforce
• Partnerships become more fragile
• Capital becomes more expensive
• and stakeholder confidence weakens

In Asia, especially, institutional credibility carries enormous commercial and cultural importance.

The starting point for rebuilding trust is consistency between what organisations say and what their actions and data actually show.

Stakeholders are realistic. They understand uncertainty exists.

What they want is honesty:

• Clarity about what leaders know
• Transparency about what they don’t know
• Credible explanations of how risks are being managed

The organisations that communicate only when things are positive are often the ones that lose credibility fastest during crises.

Governance also has to evolve.

Non-financial and geopolitical risks can no longer sit as passive board agenda items that receive brief discussion and move on.

Boards need:

• Substantive scrutiny
• Clearer accountability
• More forward-looking disclosure
• More robust internal challenge processes

Board meetings should not become exercises in consensus and rubber-stamping.

They should create space for difficult conversations.

Ultimately, trust is not rebuilt through communication campaigns.

It is rebuilt through the quality of leadership, governance discipline, and the integrity of information that organisations provide consistently over time.

Final Thoughts: Southeast Asia’s Next Competitive Advantage May Be Resilience

For decades, Southeast Asia’s economic story was built around openness, efficiency, and rapid growth.

Those strengths still matter.

But the environment surrounding them has changed.

Geopolitical fragmentation, energy insecurity, technological disruption, and institutional distrust are no longer isolated issues. They are now deeply interconnected forces reshaping how businesses operate.

And increasingly, resilience itself is becoming a competitive advantage.

Not resilience as caution or defensiveness.

But resilience as the ability to absorb shocks, adapt quickly, maintain trust, and continue making decisions under uncertainty.

For finance leaders across the region, that means the role is expanding far beyond stewardship.

Because in today’s environment, the organisations that survive — and ultimately lead — may not be the ones that optimise fastest.

They may be the ones most capable of navigating complexity without losing clarity, credibility, or strategic direction.

Read the Chinese article here.