The ‘biggest threat to global order since the 1930s’ is underway and every CEO is talking about it

The United States is facing its fourth major inflection point in history since the early 20th century, and if world leaders get it wrong, the results could be similar to what occurred during the 1930s and ultimately led to World War II. That’s according to Frederick Kempe, CEO of foreign policy think tank Atlantic Council, and it is a fear he says more CEOs of major corporations are focused on today.

JPMorgan CEO Jamie Dimon recently warned, “This may be the most dangerous time the world has seen in decades.”

According to Kempe, that’s a feeling shared in many corporate boardrooms.

“Every CEO, all the banks I am talking to, are factoring in geopolitics in their thinking in a way they didn’t five years ago,” Kempe said at the CNBC Global Evolve virtual summit on Thursday.

This shift has not happened suddenly with the outbreak of war in the Middle East between Israel and Hamas, Kempe said. It has been building over the past five years as a series of exogenous shocks have upended the status quo in markets.

“Putin’s war in Ukraine was a wake-up call,” Kempe said, with more C-suite members building geopolitical analysis into government affairs teams, adding outsourced relationships with consultants, also bringing more risk management into C-suite positions.

“No one is saying it won’t affect business. … Geopolitics is coming into the board room in way it hasn’t in my lifetime,” he said.

He said it is reasonable for CEOs to conclude it might get worse. The first four years of the latest decade have included four exogenous shocks: COVID, a “sloppy” withdrawal by the U.S. government in Afghanistan which weakened the U.S. standing in the world, contributing to Putin’s decision to invade Ukraine and the need to move entire businesses out of Russia, and now the outbreak of war between Israel and Hamas.

“You may not be able to predict the next risk, but if there is one in each of the first four years [of the decade] why wouldn’t there be more in the next six?” Kempe said.

The last three major inflection points in history were World War I, World War II, and the Cold War, and now the tensions and risks are higher than ever. “There’s a more interconnected world than we’ve ever had with technological capability to do more harm more quickly,” he said.

Kempe believes it’s up to the United States to ensure the global system stays intact. He cited the choices made by the U.S. after World War I that led to isolationism, the Holocaust, and millions of deaths, while the nation “got it right” after World War II, he said, resulting in international institutions like the United Nations and NATO.