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After years as the near-exclusive purview of analysts, actuaries and auditors, the global financial crisis propelled risk to the top of the broader corporate agenda. Seemingly overnight, every board wanted expert directors, and the language of business became peppered with beta analysis, fiduciary liability, hold-harmless agreements, mitigation strategies and probability.
Risk, of course, is nothing new to companies or their leaders. Neither is the drive to manage it. But the spectrum of risk encountered in the normal course of business—especially in global markets—is more vast than ever. And the global financial crisis shone a particularly bright light into its every nook and cranny.
But for all the attention that risk management has recently attracted, there continues to be a singular gap in the prevailing approaches: the failure to fully integrate communication strategies at the outset.
Whether a company is trying to contend with a dramatic political shift, manage investor expectations, attain social licence or mitigate a data breach, a comprehensive communications plan is imperative. It’s all the more important in the age of social media, when valuable corporate relationships and brands that have been burnished for years are squandered in seconds.
Once compromised, trust and reputation can be extremely difficult to reclaim. Furthermore, in an intensely competitive global marketplace fuelled by information technology, a temporary setback can be instantly transformed into a permanent advantage for rival firms.
Even the most resolute skeptic can quantify the cost of inadequate communication to a company’s bottom line. A collapse of confidence swiftly translates into a dive in share price and an increase in the cost of raising capital. Failure to connect with stakeholders and win social licence to proceed with a project can add millions of dollars to a budget. An unmitigated data breach can mean the enduring loss of business and, in the worst cases, expensive liability.
After more than 15 years in the field of high-stakes communication, Navigator has frequently supported clients on the frontlines of risk mismanagement. Over that time, the need to respond quickly and with assurance has increased exponentially. The cost of striking the wrong note, conveying confusion or failing to respond has also increased significantly.
In the end, the ultimate tools in managing modern risk are surprisingly old-fashioned: be prepared, listen to others, respond and adapt to change, tell your story, communicate your intent. Aggregate all of that in a strategic communications plan.
In this issue of Perspectives, the Navigator team has pulled together some of our current thinking on risk management and the tactics—from research and strategic stakeholder engagement to governance—that help companies take the lead in dealing with the variables and vagaries of daily business.
As always, we hope our views provoke some thought and, even better, some feedback.