In today’s global landscape, the pressure is on for companies to stand up for what they believe in and champion their values with concrete actions. High expectations and the eroded control of corporate narratives have joined forces to create a new category of enterprise risk: Social Risk.
To better understand the expectations placed on businesses by society and leaders today, we surveyed a select group of 16 members of APCO’s International Advisory Council (IAC), and asked them to share their perspective on social risk.
All 16 of the surveyed IAC members agreed to varying extents that: 1) companies have the ability to shape a better society and 2) solutions to the greatest problems facing society today will rely on the resources and innovation of businesses, demonstrating the expectations placed on companies today.
While the stakes for businesses are high, the surveyed IAC members also agreed that companies should only act on issues in line with their core values. All of the IAC members in our survey agreed that positions on social issues that companies support should be consistent with their core mission and expertise.
Where our surveyed IAC members disagreed was on their perceptions of businesses’ understanding of their social impact. When asked “How well do you think companies generally understand the social impact of their business model?” the IAC members were split with 62% responding “somewhat well” and 38% saying “not too well.”
In Their Own Words
Finally, we asked our IAC members who participated in the survey to share their thoughts on how companies can do a better job of identifying and anticipating social risk. Here are some of their answers:
There are few things companies can do: 1) own their place in society; 2) spend conscious time as a corporation wrestling with great issues of the day; 3) create a person and corporate values statement; 4) be bold, not timid; and 5) involve and serve all stakeholders. – Steve Bartlett, former Congressman and Mayor of Dallas.
Companies should consult and listen to their employees, customers and partners. I think this is a crucial and emerging area for businesses. Awareness is modest while the potential for good is great. – Elaine Kolish, former vice president of the Children’s Food and Beverage Advertising Initiative.
Companies can do a better job of identifying and anticipating social risk by implementing a formal issues-scanning protocol, prioritizing identified risks and establishing a structure to address issues with a long-term view. – Nick Ashooh, former vice president of corporate affairs for Alcoa and senior vice president of communications at AIG.
Companies should do thorough audits on a regular basis, analyzing everything from conditions in their supply chains, political situations in countries they are investing, looking at their labor policies, including issues of wages, gender, race, etc. They should also look at potential risk in their product- is it environmentally friendly and consider other issues that may make it vulnerable. – Orit Frenkel, former senior manager for GE Global Government Affairs.