Country Risk & Threat Advisory: Grey Area Dynamics A challenge of diagnosis and delivery

The corporate need

Target-specific due diligence is slowly becoming an accepted part of corporate strategy. This is diligence conducted against a handful of entities, be they individuals or companies, on a strict set of terms aimed at clarifying any potential issues of concern about the targets before a particular deal, partnership, or project. It is (for the most part) specific, focused, and refined.

But there is also the need for businesses entering new markets, whether for the first or fiftieth time, to understand the whole host of variables at play, and the likelihood and impact of each.

Crucially, these variable risks may not always be immediately apparent to diagnose, or specific to a given issue: they are the inherent, general problems posed by a market; the grey area dynamics that can significantly affect every aspect of a business’ finances and reputation. So-called, because they represent change and activity (not always for the better) and have deciding says in markets that are never always entirely black and white. It is in the grey area that a client’s chances of success or failure may be decided.

Moreover, there is never a one-size-fits-all solution. Understanding to a very granular degree where the risk lies, and in what direction, can be of inestimable benefit in a client deciding where to commit, how much to invest, and the extent of their risk appetite. But as with any danger, to be able to face it, you must first know where it lies; and the more you know about the form it takes, so much the better.

The challenge is, therefore, creating a mechanism that transmits the nature, severity, and impact of these GADs to the Client in a manner which considers the multitude of risks at a granular level, but which is still packaged in an easily understandable framework which is actionable and appropriate.

What are GADs?

Grey Area Dynamics (GADs) are all the risks, weakness and threats that have direct and measurable impact on businesses. They are a collective description of behaviours and factors that can, at best, disrupt a firm and, at worst, close it down. Ignorance of, or objection to, their impact has, on some occasions, even led to fatalities.