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Galson Sciences Ltd - Why it matters...

In recent years we have seen notable instances where technical, commercial or scientific risk assessment and ‘logical' argument have failed to convince a variety of important stakeholders. There is the continuing opposition to radioactive waste disposal, the furore surrounding genetically modified organisms in the UK and Europe, the BSE scare, and opposition to the deepwater disposal plan for Shell's Brent Spar, to name but a few.

The continuing debate surrounding the health effects of mobile telephony is another example where stakeholders increasingly demand precautionary approaches to the management of risk.

Perceptions, attitudes and opinions regarding a range of commercial and industrial risks and issues will always vary greatly amongst different interest groups. Accounting for and managing stakeholder perceptions and societal expectations of an organisation's behaviour is an increasing challenge to decision-makers. Scientific and commercial arguments for business and regulatory decisions no longer go unchallenged. The rise of digital communications and the Internet mean that communities and interest groups are able to network and mobilise support or opposition rapidly, often nationally and even internationally.

The failure of scientific assessment or commercial argument to persuade key audiences can result in a range of outcomes, from consumer boycotts, to expensive delay, to reversal and review of projects, to the longer-term erosion of trust and confidence. The old-fashioned "Decide : Announce : Defend" (D.A.D.) approach to project risk management has effectively become the D.A.D.A. approach - "Decide : Announce : Defend : Abandon". Reputations, and share prices, can be damaged overnight. Longer term consequences may include difficulties in maintaining customer loyalty, in recruiting and retaining staff, the devaluation of corporate brands and any related price premium, and the loss of ease of operation enjoyed when reputations are robust and less prone to challenge.

This "social amplification" of risk can be broken down into discrete stages in the risk communication process, as set out in the accompanying diagram. Any approach to risk management for a controversial issue will therefore need to consider carefully the implication at each discrete stage. While any single issue will be unique in terms of the range of stakeholder concerns and perceptions at work, and in terms of the most effective risk management and communication approach to adopt, there are clear guiding principles to follow. The modern approach to contentious issues requires effective communication and stakeholder dialogue around options, costs and benefits.

Many organisations are beginning to recognise the value of establishing clearly defined principles and values that are reflected throughout corporate decision-making and are credible, transparent and accessible to key audiences - particularly employees and local communities. The same organisations also recognise that the issues that will test their principles and values, and by which their reputations will rise or fall, are too important to leave to traditional "PR" techniques, which are frequently bolted-on after important decisions have been made.

The objective is to apply best practice in identifying and then managing both the actual and the perceived risks by researching and analysing them professionally, and by communicating effectively. This approach is primarily concerned with the development of trust and public confidence. It requires skill, knowledge and training.