330: The role of public affairs in risk management
The management of risk is fundamental to the success of any organisation, as well as being, for many, a legal requirement. But what role can public affairs play and how can it help manage risk?
Fundamentally, a lot of risk is created by politicians and government. They are not the only ones who create risk, but they can have major impacts on the operation of any organisation through changes in laws and regulation. They can also inflict significant reputational damage as well.
Much of those does not happen deliberately. Sometimes it is because of poor levels of knowledge. So, any organisation, as a starting point, needs to ensure that government and key political stakeholders have a level of knowledge and understanding about sectors as well as individual organisations. They also need a way into organisations as well.
There are several key ways in which public affairs can play an important role in the development and execution of risk registers. These include:
- Information contribution – providing insight drawn from across the media, politics, government, and other stakeholders that can be used to assess risk.
- Map a response – critically, the public affairs contribution needs to help contribute to management of the risk. That could be through identifying the correct audiences but also the messages to be delivered.
- A channel into an organisation for key stakeholders – this could be for more information, with key questions or simply being asked to be kept informed. This open channel itself can help to manage risk.
- A clear demonstration of accountability – communicating with key audiences on the measures being taken shows that an organisation is being well run. That undoubtedly contributes to the strengthening of a reputation.
- Monitoring – being alive to changes – actual and potential – on an ongoing basis is a core strength of public affairs and should be used as part of the regular reviews of a risk register.
Ignore at your peril
There is a real danger for any organisation when it ignores the potential contribution of public affairs. Let’s suppose that an organisation decides that government poses no risk. That is itself unlikely but could be possible. A not unreasonable decision could then follow not to engage with government. Some may fear that engagement could raise the profile of an issue, accidentally increasing risk.
But the reality, based on an understanding of how government works, is that there is always work taking place in the background. A vacuum will simply be filled. Action taken by government is not irrational. It is often completely rational but the result of poor levels of understanding or misinformation.
So instead of helping to contribute towards a virtuous circle (risk ID’d, action taken to resolve including engagement), the lack of public affairs input can lead to a vicious circle of misunderstanding which increases risk. Instead of risk being managed, it is, by excluding public affairs, having the opposite effect.
Government needs the input of organisations. A better understanding, based on knowledge, experience, and data, leads to better laws and regulations. It is lessening the chances of an unexpected knee-jerk reaction. A decision not to engage because an immediate risk is not perceived is, in reality, a decision to create future risk.