New times, new rules for risk management

We are in the context of “permacrisis”, the word of the year 2022 to the British Collins Dictionary. Yes, we coexist in a prolonged period of instability and insecurity, which keeps us awake and in constant polarization.

As he discovered A report by LLYC and More Democracy titled “Hidden Drugs. A study on the contagious power of polarization of public debate “polarization is increasing in the world, almost 40% in Latin America and 2.2% in the USA. in the last five years.

Undoubtedly, this panorama makes companies realize that we are in “New times” and we need “New rules” continue navigating unexplored scenarios and protect the reputation of the company, as the main capital of the business. The uncertainty caused by this reality can paralyze us, but if we understand how these new rules work, it will be easier to prepare the operation for prediction and management reputational risks.

Understanding reputational risk as any event that, in a given context, can subject company behaviorregardless of size or sector, causing a negative reaction or suspicion among its stakeholders.

The imperative question is where we should begin to manage reputational risks in this context. At least let’s focus our efforts on three keys. The first is forecasting: to identify, assess and evaluate reputational impact of future events using new technologies and big data to create real projections that go beyond human intuition. That is, let’s use a solid foundation of data, trends, and assumptions to predict likely scenarios. That in this context, changes can materialize at one moment and threaten the sustainability of the business.

The second key is proactive risk management: why we can’t stayWith only identification and analysis, it’s like being able to predict a tsunami and stay home and hope the wave doesn’t sweep you away. There is no doubt that this requires a shift from being reactive to being proactive.

For example, the sustainability frontier is expanding, and ESGT factors and risks are increasingly influencing the decision-making of companies, governments and consumers. So how do you risk it? identified and probable in time, don’t we attack him from now on? Knowing that if they come true, they can test the pillars of the brand or the business model itself.

Along with organization and creativity, the company must design and implement a strategy to increase the support of clients, suppliers, authorities and other key stakeholders so that when this risk is activated, its effect is nil or very low because it already exists. We manage in advance.

The last key is the definition of i activation of corporate purpose: as leverage recovery of reputational capital in the context of severe crises or persistent risk environments, as is the case in this permacrisis.

Corporate purpose in the instrument leadership, led by the chief executive officeris how companies deliver value and positively impact their stakeholders.

Corporate purpose is no longer an intention but a necessity. It is the way in which companies no longer act alone, but make a decisive contribution to the great challenges and social demands in the markets in which they operate. And it’s not about “having a purpose,” it’s about listening to a brand’s audience to understand their needs, so that purpose meets their expectations, so that to have resonance and empathy. An inspiring purpose, it is the backbone of the company’s public conversation. And that it is measurable and that it is in constant evolution and progress.

An understanding of this size is that the purpose manages to be “lived” by all actors around the brand and then much more value and efficiency is needed to deal with reputational risks.

In short, foresight, timely risk management, and strengthening purpose as part of business strategy are three of the first actions every company should work on in this “New time” where to meet these “new rules” they will be the difference between trying to survive every reputational risk or empowering the entire organization to manage these challenges, which are far from disappearing.