Risk managers must react calmly to media panic
The way in which publicity and perception of risks can influence investment in risk management will be the focus of a presentation led by Geoff Taylor, a global client advocate for Willis, at this year’s AIRMIC conference in Birmingham, which starts this afternoon (Monday June 16),.
The session, titled ‘Is Risk Changing Or Is Our Perception of Risk Changing,’ will examine the way in which a media frenzy such as the panic over bird flu can sometimes cause excessive spending in an effort to control a risk that may not, in reality, prove to be particularly big.
“We’ve seen lots of crises over the years that get blown out of proportion – Y2K or bird flu, for example,” said Taylor. “People perceive risk in a disproportionate way whereas the risk manager’s role is to put risk into context, particularly around the business. They need to consider what is it that is going to blow the business off course and make the business not achieve its objectives.”
The session will include a debate on how to gauge people’s perception of risk. In Taylor’s opinion, the media plays a highly significant role.
“If there’s an earthquake or factory collapse, if a plane goes missing or there’s a big terrorist event, people do get captured by what’s hot, what’s current – that’s human nature to some extent because we’re all attracted to news,” he said.
He said the risk manager needs to remain calm and level headed in the face of any crisis.
“They need to be resilient to that crisis and have the right plans in place, the right teams of people who are briefed and understand how the business continuity or crisis management plan works or what needs to be communicated,” he said. “There are key roles that are played by people and the corporate governance environment means they should absolutely be on top of this – it is no longer an excuse to say, ‘we didn’t know.’”
Taylor hopes that the risk managers and panellists in Monday’s session will have some different views on the topic. His personal perspective is that one of the jobs of the risk manager is to not let the corporation get diverted from its main business-as-usual task of managing risk, and allocating resources appropriately.
