Political risk
Political risk concerns uncertainty arising from political conditions, government decisions or related policy changes that could affect an organisation. It can include instability, trade restrictions, changes to operating permissions or other interventions. Exposure depends on the activities and jurisdictions involved; political risk is not limited to operating abroad.
Worked example
A change in trade policy increases the cost of imported components. A domestic manufacturer evaluates alternative sourcing and pricing, showing that a locally based firm can still be exposed.
Common mistake
Treating every political development as an identical threat or assessing a country label without linking it to the organisation’s actual activities.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| ACCA | SBL | Supporting | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |