Article Collection

Good risk management in PR planning

01 Jun, 2020 Annual communication plans, Communication campaigns, PR planning, strategy, budgeting

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. There is no doubt that good risk management is important in PR planning.

Generally, there are considered to be five 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.

In PR practice and communication management, control of risks is especially relevant to activities like:

  • Major events
  • Issue and crisis prevention and minimization
  • New product launches
  • Reputation building
  • Sponsored events
  • Social media campaigns
  • Trust strengthening.
  • We only need to see the way Facebook has handled its responses to the various business blunders it has made to see the way the company’s reputation and share price have suffered in recent times. The company’s share price dropped nearly 40% in the four months from July to November 2018 due to revelations about the unauthorized handling of user information, security breaches involving 50 million users, and the company’s use of a PR firm to denigrate its competitors. Such issues continue to plague the organization well into the 2020s. A name change to “Metaverse’ is going to do nothing to improve its reputation – only showing the company may have changed its name but hasn’t lifted its way of operating.

Reputational risks

Communicators tend to focus strongly on reputation risks, which are negative events that will diminish the opinions that stakeholders have of your organization, and therefore stakeholders’ willingness to give their support. Protecting and strengthening reputation is a key area in which to manage risk in your communication work, or if you prefer: risk management in PR.

Reputational risks relate to the likelihood of negative perceptions adversely impacting an entity’s income, brand, support, and public image. Reputation penalties can be huge. Just look at the crises experienced by major companies in recent years when they failed their operational and ethical obligations and paid major formal and informal penalties: BP (Deepwater Horizon explosion and oil spill – cost $62 billion), Toyota (airbag problems), Wells Fargo bank (fake accounts scandal) and Volkswagen (car emissions fraud)

A corporation with a low reputational risk is positioned to gain greater stakeholder support and enjoy higher returns. On the other hand, a company with high reputational risk is less likely to overcome a PR-related crisis. These companies are not in a position to withstand a drop in stakeholder support, and often suffer legal setbacks and major loss of revenue as a result.

Risk defined

Business risk is defined as the chance of something happening that will have an impact on objectives. Risk is measured in terms of likelihood and impact.

Some people think communication practice doesn’t involve much risk, which they believe 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 – it has been proven to have major dollar value. There is proving to be a very real need for risk management in PR.

International political changes are obvious examples of business risks. The global COVID pandemic, the UK decision to leave the European Union, terrorism activity, and the incoming US government administration in 2016 all have raised sudden, unforeseen risks creating potential disaster. And who would have foreseen the US President being a frequent liar?

In addition to potential communication risks, risks are prevalent in all areas of corporate life. We should be alert to these because communication may be needed to address internal and external corporate and operational risks.

Key benefits from risk management:

  • It reduces the likelihood of unpleasant and costly surprises.
  • It provides better information for strategic planning and decision-making.
  • It leads to more realistic allocation of resources, especially financial resources.
  • It generates better results from communication programs and projects.
  • It creates better compliance with regulatory requirements.
  • It helps to more accurately define the scope of required insurance cover, which can lower insurance costs.

Risk management comprises the culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects. The role of risk management is to identify potential risks and take action to reduce the chances of those risks becoming reality and to reduce the magnitude of incidents if risks do turn into reality. Note also that the risk management process can identify potential opportunities from risk, just as issues and crises can create opportunities as well as problems.

What can go wrong?

In simple terms, risk management is intended to answer three questions:

  1. What can go wrong?
  2. What is the likelihood and impact of something going wrong?
  3. What can we do about it?

Risk management should be a continuing process starting at the planning stage of all significant communication and public relations programs and projects.

Eight steps in risk management

Seven steps are commonly used for risk management

  1. Establish the context
  2. Identify the risks
  3. Analyze the risks
  4. Evaluate the risks
  5. Establish a risk register
  6. Treat the risks
  7. Monitor and review
  8. Communicate and consult.

Further reading

You can read in further depth about risk management in comms planning in my article, “Management of risk in your communication planning.”

If you enjoyed this article, we recommend this book

Annual Communication Plans Annual Communication Plans

About Kim Harrison – author, editor and content curator

Kim Harrison, Founder and Principal of Cutting Edge PR, loves sharing actionable ideas and information about professional communication and business management. He has wide experience as a corporate affairs manager, consultant, author, lecturer, and CEO of a non-profit organization. Kim is a Fellow and former national board member of the Public Relations Institute of Australia, and he ran his State’s professional development program for 7 years, helping many practitioners to strengthen their communication skills. People from 115 countries benefit from the practical knowledge shared in his monthly newsletter and in his books available from

Articles, Ideas & Information to boost your career