Why CMOs must be at the forefront of risk mitigation
- 30 May, 2019 08:11
Risk to reputation and brand remains the top concern of business leaders in Australia, and it's the marketing chief who must remain front and centre to mitigate this risk, according to Aon.
Aon’s recent 2019 Global Risk Management Survey found economic slowdown and volatile market conditions have led to the lowest levels of global risk readiness in 12 years, impacting the c-suite’s ability to manage volatility and maximise performance.
And brand concerns have risen as a result. According to the report, in 2017, Australian respondents ranked regulatory and legislative change as the top risk facing local business. Two years later, however, this risk has receded as a concern to local business, and damage to brand and reputation tops the list.
Aon Australia managing director for large clients, Bruce Gordon, told CMO brand and reputation risk has always been at or near the pinnacle of risk issues since Aon created the Global Risk Management Survey more than a decade ago.
“What is beyond dispute is the existential threat damage to brand and reputation can present to organisations. The increase in risk complexity/interconnectivity evident across all walks of commerce and industry has been accompanied by ever-accelerating public access to social media - everybody’s a broadcaster and everyone has a platform from which to disseminate their opinion,” he said.
“In an environment where speed can often trump accuracy, the wheels of justice grind slowly. The importance of organisations identifying, analysing and evaluating their exposure to brand and reputation risk, and then mitigating/managing it in a pre-emptive manner, cannot be overstated.”
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Of course, this all requires the CMO to be front and centre, Gordon said. “The planning process needs to embrace both how to avoid loss and how to contain it. Moreover, the opportunity is there for CMOs to step into this space, working with their organisations’ other critical risk assets," he said.
“So if anything, the role of the CMO is becoming more important in dealing effectively with brand and reputation risk.
“Whether it is the threat of cyber-attacks and cybersecurity, or a major project failure, the prevalence of social media and the 24/7 news cycle has the potential to create rapid contagion and this can have an immediate and lasting impact on an organisation’s shareholder value and reputation,” Gordon added.
Failure to attract or retain top talent also remains a top 10 concern for Australian business, at number seven, unchanged on 2017, but has receded in terms of deemed significance in the rest of the world.
“Australian businesses are finding themselves operating in a difficult environment, with recent changes to sponsored employment visas limiting organisations’ ability to source top talent from overseas. It therefore comes as no surprise that this risk issue should rank higher in the consciousness of Australian business leaders,” Gordon said.
Australian top risks
- Damage to reputation / brand
- Economic slowdown / slow recovery
- Business interruption
- Increasing competition
- Cyber attacks / data breach
- Cash flow / liquidity risk
- Failure to attract or retain top talent
- Failure to innovate / meet customer needs
- Regulatory / legislative changes
- Accelerated rates of change in market factors
Global top risks
- Economic slowdown / slow recovery
- Damage to reputation / brand
- Accelerated rates of change in market factors
- Business interruption
- Increasing competition
- Cyber attacks / data breach
- Commodity price risk
- Cash flow / liquidity risk
- Failure to innovate / meet customer needs
- Regulatory / legislative changes
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