Managing geopolitical risk will take more than resilience
Jim Mesterharm, Global Co-Head, Turnaround & Restructuring Services
The price of paralysis
Insights from our 20th Annual Turnaround
and Transformation Survey
96%
agree that geopolitical disruptions will directly lead to increased distressed situations
In an era defined by geopolitical upheaval and economic complexity, the old rules no longer apply. As global financial markets react to intense geopolitical tension, business leaders face a paralyzing forecast of anxiety and uncertainty. Yet with this complexity comes the opportunity for executives to act and create stability in a volatile world.
Our 20th Annual Turnaround and Transformation Survey reveals how management teams can respond – and where many may be falling behind. With fears of recession rising and the cost of capital tightening, the pressure to act has never been greater.
The risk landscape has changed
This year marks two decades of our survey. In that time, we’ve tracked how businesses have weathered global financial crises, pandemics, and sector-specific slowdowns.
2025 presents a uniquely volatile mix of geopolitical tension and economic fragility. From tariff shocks and global conflict to regulatory volatility and political turnover, the pace of change is accelerating. Amid today’s destabilizing forces, one message is clear: leaders must avoid paralysis and act now.
Headline findings
Macroeconomic impact
70%
of respondents expect economic
decline in their region in the next 12 months
53%
identified the Americas as the
region most likely to face distress in 2025
Financial pressure
74%
anticipate a recession in
their region in the next 24 months
70%
predict an increase in out-of-court
restructurings over the next 12 months
Drivers of distress
Top three distress triggers
43%
Geopolitical
instability
27%
Regulatory change
including tariffs
12%
Cost/availability
of capital
"Geopolitical disruption has firmly moved to the top of the boardroom agenda. Agility, once again, must become a core operating principle. CEOs and boards need to move fast to strengthen their organizations’ ability to absorb external shocks, pivot at speed as economic conditions evolve, and make the right decisions."
Sector risk
Organizational challenges
*Each respondent was asked to identify up to three different sectors
“This environment, with a variety of financial forces at play, has made traditional financing avenues more challenging to access, and companies under stress are increasingly turning to alternatives like Liability Management Transactions. Ultimately, these efforts should be integrated into a broader turnaround plan, creating a vital record of sound decision-making by management teams and at the board level.”
Explore the full survey
Download the 2025 Turnaround and Transformation Survey to gain
deeper insight into:
• Viewpoints from 25 global experts
• The top-ranked sectors for potential distress
• Macro forces reshaping business priorities
• The factors holding back transformation
• Immediate actions companies should take to stay ahead
Leadership perspectives
