Many types of risk concerns have emerged more into our thinking in recent years, including the biggest one of all – the coronavirus pandemic, which has affected every aspect of society around the world. We are much more aware and concerned about the risks to ourselves, our organization and our community. Reflecting this, risk management will be treated as a much more important business activity in future. And it will play a larger role in good communication practice.
Generally, there are considered to be main types of broad business risks:
- Strategic risks in the business and political environment
- Compliance risks – complying with rules and regulations
- Operating risks – events that severely disrupt operations, such as natural disasters, power supply, management complaisance or incompetence, cyber security attack, etc
- Financial risks – relating to the money flowing in and out of the business
- Reputational risks – a ‘soft’ term, but with major business implications.
Business risk is defined as the chance of something happening that will have an impact on business objectives. Business risk is measured in terms of likelihood and impact. Some people think public relations practice doesn’t involve much risk, which they think is more about operational matters such as safety and security.
However, there is an element of risk in all public relations activity. Think of the risks to the organization inherent in a bad reputation, in controversial public issues, corporate crises, sponsorships turning bad, poor counsel to senior management, hyped product claims in marketing communication, use of celebrities in marketing, and in corporate events that go wrong. Many risk management experts believe that reputational risk is one of the most important – a PR risk that has major dollar value.
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