Senior leaders use risk as an opportunity to derive value. According to PricewaterhouseCoopers (PwC) dealing with risk provides organisations with constructive lessons that they can use to develop reputational resilience.
The professional services organisation recently collaborated with the World Economic Forum to determine how senior executives around the globe deal with risk to derive value.
Here is a list of five best practice solutions that senior corporate affairs leaders engage in:
1. Educate everyone in company values
Successful leaders protect the integrity of their business using a holistic approach. It is not just corruption and fraud that an organisation must safe guard against. Personal attitudes and behaviour of the employees also play a huge role. It is compulsory to constantly educate staff about organisational values.
According to the report: "It takes only one part of an organisation to damage the whole, so a strong common culture and set of values are vital to support your organisation's resilience".
2. Avoid critical risk breaches
Certain types of violations of policy should be unacceptable without exception. It also important to hire experienced senior executives who can communicate this message company-wide.
PwC quotes the example of global construction company Skanska, which introduced a "five-zero" policy to operations to convey zero-tolerance to certain risks.
By virtue of being an employee of the company every staff member commits to: zero loss projects, zero environmental incidents, zero workplace accidents, zero ethical breaches and zero quality defects.
3. Do not take anything for granted
The World Health Organisation (WHO) is a great example of a body that challenges its core assumptions on a regular basis to develop risk resilience.
In 2009 when the H1N1 pandemic spread at a very large scale WHO questioned its assumption that only multinational pharmaceutical companies could increase production to supply vaccines to meet the growing demand lesser developed countries.
As a result the organisation introduced schemes to produce the vaccine in developing nations.
The lesson here is that corporate affairs professionals must develop processes and systems to monitor and when necessary challenge the legitimacy of certain beliefs that a company may develop over time.
4. Support your staff
By taking an interest in developing the workforce, senior management is actually making an investment to develop a resilient organisation.
Whether it is a small problem or a large scale reputational disaster, employees who feel loyal to the company will stand by it helping keep things stable.
The World Economic Forum report suggests: "It may seem counter-intuitive for businesses already suffering disaster losses to take on further risk or spend additional capital on behalf of their employees. However, the evidence shows that without the prompt return of employees who are fully committed to restoring the capacities of business, it is likely that companies will face a longer recovery period and may fail altogether."
5. Use independent data to make decisions
In a crisis, when it is crucial that decisions are based on accurate data, corporate affairs professionals should rely on independent and trust-worthy sources of information.
For example, the Deutsche Bank in Japan was able to make the best possible decisions during the Fukushima disaster because they relied on independent risk data.
6. Be prepared for a crisis
Corporate affairs professionals and risk managers must be prepared to deal with a crisis at all times.
In the case of Deutsche Bank, following the Fukishima disaster it has launched a global initiative to prepare managers using real-life crisis simulations. This will help the company respond quickly and courageously should when faced with a catastrophe.
In the 21st century risk is more a part of corporate life than it has ever been before. Therefore, developing resilience to risks, too, is crucial to surviving in the modern world.