Risk Management: Reputation Is Key

Ennis, Trish

Texas City refinery. Upper Big Branch mine. Deepwater Horizon. Tazreen Fashions factory. Rana Plaza. Each of these tragedies was caused by a chain of events that included safety and health system deficiencies. They have something else in common, too: They all caused significant damage to the reputations of the organizations involved.

As OSH professionals, we may not often think about reputation risk. In fact, as recently as 2005, reputation risk was not on the radar of most CEOs, nor risk managers. Today, however, it is a critical concern. According to Deloitte's 2014 Reputation@Risk survey (which you can view at http://bit.ly/ Iu01jb4), 87% of the 300 global executives surveyed rated reputation risk as more important or much more important than other strategic risks their companies are facing. Deloitte's report also cites a 2012 World Economic Forum report that found that on average more than 25% of a company's market value is directly attributable to its reputation.

So what does this mean to OSH professionals? It presents us with a significant opportunity to communicate with our executive teams about how OSH issues feed into the organization's larger risk position. Furthermore, it is an excellent opportunity to influence our organizations' strategic direction. Organizations that are genuinely interested in effectively managing risk, particularly reputation risk, look to OSH professionals to be key contributors to strategic planning, budgeting, crisis management and enterprise risk management.

How can we most effectively fill these important roles? As OSH professionals, we use risk identification and risk assessment tools each day to identify and mitigate hazards to prevent injuries and illnesses. We must now begin to assess OSH information using a second set of questions: How will this risk affect the organization's financial performance? How can managing or eliminating OSH risks increase operational efficiencies and enhance regulatory compliance? How will customers/stakeholders view the risk if it becomes a crisis?

ASSE offers a wealth of resources to help us answer these questions and develop broader professional competencies. For example, the ASSE Risk Assessment Institute offers access to a wide range of tools, standards and research. The Society's Risk Management/ Insurance Practice Specialty produces technical content that aims to advance our knowledge in this important skill area. In addition, ASSE's conferences, webinars and continuing education programs, including the Certificate in Risk Assessment program that will launch during SeminarFest 2015 next month, provide many opportunities to build and refine our risk-related skills.

We must also be aware of global developments that are driving greater interest in risk-based decision making. Global organizations including the Center for Safety and Health Sustainability, and International Network of Safety and Health Practitioner Organizations are advancing OSH initiatives. International Organization of Standardization (ISO) is developing the 45001 standard that will set the direction for global safety and health management systems-systems that rely extensively on risk assessment practices and risk management processes. As Scott Cooper explains in "Improving Worker Safety in Global Supply Chains" (PS, Oct. 2014, pp. 2933), ISO 45001 will provide a road map for OSH professionals to use when evaluating organizational risk and building a safety management system to manage that risk.

Each day, incidents occur that could signal a pending crisis. More and more companies are seeking new ways to identify the emerging problems and risks that threaten their reputation. Our unique abilities to anticipate and control hazards each day positions us as valuable risk management resources who can contribute to those efforts and help our organizations continue on the path toward business success.