Reduce, Research and Reckon with Risk

1. Reduce, Research and Reckon with Risk Sue Wolstenholme • CIPR Chartered Practitioner • December 2010

2. A Romp • Trust • CSR • Risk • News media • Reputation • Relationships

3. Trust • Trust is the cement in the relationship between institutions and civil society. When trust breaks down, civil society either withdraws from participation or expresses protest outside the mainstream channels of participation Greenwood (2003:49)

4. Trust The pursuit of ever more perfect accountability provides citizens and consumers, patients and parents with much more information, more comparisons and more complaints systems - but it also builds a culture of suspicion, low morale and may ultimately lead to professional cynicism - and then we would have grounds for mistrust Onora O’Neill, BBC Reith Lectures, 2002

5. 2010 Trust Barometer

6. Sources

7. Credibility

8. Money and reputation

9. Sceptics?

10. Building Trust • Corporate social responsibility • Hobbes, Rousseau and Rawls • Quakers • Education • Communication

11. Benchmark • Company position Philanthropy Enlightened self interest Business basics – law health and safety

12. The place of CSR Company mission Objectives/priorities Community needs and expectations Employee development interests

13. Matrix • Core values • Business objectives • Key publics • Employee support

14. Corporate Social Responsibility • A concern with these issues can actually lead to improved performance Crowther – Social environmental accounting September 2000 • Sustainable companies, ie companies integrating economic aspects with environmental, ethical and social – yield a larger return than conventionally managed companies Holmstrom, S The Reflective Paradigm – Masters thesis 2002

15. The Co-operative Bank • Why are you our customers • What else do you want (30,000) • Human Rights – 90% • Armaments – 87% • Animal exploitation – 80% • Environmental damage – 70% • Fur trade 66%

16. Buddha • As the bee collects nectar and departs without injuring the flower, its colour or its scent, so let the sage dwell in his village

17. A Theory of Public Trust • Crises very often become trust crises • There is danger in the possibility of jumping-over of trust losses to the next level Trust losses in larger socialsystems (economy, democracyas a politicalsystem, etc.) Trust losses in smallersocialsystems (health, finance, pensions, etc.) Trust losses in organisations, products, brands, services Trust losses in individual actors/agents Gunter BenteleBledcom 2009 17

18. Positioning • Lead the debate • Define roles clearly • Develop protocols with NGOs • Create national codes • Celebrate the partnerships • Make awards

19. Single Issue Campaigners’ Advantages • Clear vision • Simple objectives • Controversial - therefore newsworthy • Attract celebrity

20. Is this correct? • ‘balance of power has shifted too far and that companies need to wrest back control of their reputations’ • Or have we squandered it with self-centered behaviour? • Andrew Griffin – New Strategies for Reputation Management in R and L p14

23. Risk • A measure of the adverse effect of an issue • Assessing and communicating the possible hazards associated • Relative to the safeguards and benefits • Helps us as consumers to make choices about our health and safety and the protection of the environment • Regester and Larkin 2008:21

24. Auto responses to risk • Experiment • Fight • Flight • Play dead • Freeze • Renn 2010

25. Influencing decisions Economic System Channeling effectively Pareto principle Distributive discourse (bargaining) Expert System Maximizing utility/ efficiency Social System Sustaining relationships Sustaining meaning Empathy/fairness Research and peer review Cognitive and interpretive discourse Mutual understanding Therapeutic discourse Evidence/effectiveness Collectively binding norms/legitimacy Political System Sustaining order Compatibility with universal or positive principles Normative discourse

26. Public’s involvement Actors « Civil society » Affected publics Affected publics Scientists/ Researchers Scientists/ Researchers Scientists/ Researchers Agency Staff Agency Staff Agency Staff Agency Staff Instrumental Find the most cost-effective way to make the risk acceptable or tolerable Epistemic Use experts to find valid, reliable and relevant knowledge about the risk Reflective Involve all affected publics to collectively decide best way forward Participative Include all actors so as to expose, accept, discuss and resolve differences Type of participation Simple Complexity Uncertainty Ambiguity Dominant risk characteristic As the level of knowledge changes, so also will the type of participation need to change

27. IRGC’s RISK GOVERNANCE FRAMEWORK Understanding Deciding Getting a broad picture of the risk Who needs to know what, when? Pre-assessment Appraisal Communication Management Who needs to do what, when? The knowledge needed for judgements and decisions Characterisation and evaluation Is the risk tolerable, acceptable or unacceptable?

28. Dialogue • A conversation without sides • 40,000 untested chemicals • Public anxiety • Uncertainty • Negotiation

30. From communication to public involvement • Information needed for decision • Our brains are wired to forget • Allow for reflection and consideration • Inclusion – all policy options and scenarios • Preferences

31. Objectives of Risk-Benefit Communication Enlightenment: Making people able to understand risks and benefits (and their interactions) Behavioral changes: Making people aware of potential risks and benefits help them to make the right choices Trust building: Assisting risk management agencies to generate and sustain trust Conflict resolution: Assisting risk managers to involve key publics and affected parties to take part in the risk-benefit evaluation Renn 2010

32. Important Contextual Aspects • Levels of risk-benefit debates • Factual evidence and probabilities • Institutional performance, expertise, and experience • Conflicts about worldviews and value systems • Types of audiences • Peripheral versus central • Cultural subgroups: entrepreneurial, egalitarian, bureaucratic, individualistic • Renn 2010

33. Attitudes • Estimating – over for sensation under for every day • Nature and nurture • Benefit and trust • Source • Emotion Regester and Larkin (2009:22)

34. Context • Newly emerging • Degree of existing • New perception

35. Certainty and Certitude • Law Medicine • Marketing Public Relations • Evidence Belief • Consumerism Responsibility • Wolstenholme 2007

36. The Litigation Circus In 1996/97 cost the NHS £235 million - a 17% increase on the previous year. more cases more payouts worsening reputation more cases

37. How might we interpret these figures? Increased transparency?/ information - improved practices? Consumer cultureTotal number of clinical negligence claims by financial year of incident as at 31/03/05 (all years, all clinical negligence Schemes including “below excess” claims handled by trusts

38. 3 main reasons for increased number of cases • Increase in the level of malpractice (no real evidence for this) • Easier access to legal aid and clinical records • Growing consumerism among patients - greater awareness of the possibility of redress - more willingness to use it. Wolstenholme 2007

39. Defining the public relations problem • Situation analysis Defining the issue PEST(LE) Political - Economic – Social – Technical (Legal – Environmental) Gregory, A

40. Risk perception • Emerging danger – randomness threat • Creeping danger – long delay • Yes – take the risk • No – no benefits seen • Maybe – want to trust but no proof • Arbitrary • Renn, O

41. Some Major Insights Risk-benefit communication needs to address: • Difference between risk and potential hazard • Difference between random event and faulty behavior • The process of management decision making • The trade-offs and value conflicts when making management decisions (risk-benefit-balancing) • The meaning of standards and the respective protective goal behind them Trust and credibility cannot be “produced” or “manufactured” but only earned in terms of performance and effective communication Renn, O

42. Communication • Urgency - conflict • Legitimate – research and listen • Public support – parrots! • Misunderstandings create crises • Shared futures – mutual mindset • Respect social commons (Lewin) • Build significance – strengthen relationships

43. Journalists • Intellectually shallow, morally vacuous and socially privileged. • When politicians complain about journalists it’s like junkies complaining about their dealers. They both need each other. • Matthew Taylor - Fabian New Year Conference 2003

44. UK News Media • outstanding reporting and accurate writing mingle with editing and reporting that smears, sneers and jeers; names, shames and blames • Onora O’Neill, BBC Reith Lectures, 2002

45. According to Jock Young • There is, institutionalised into the media the need to create moral panics and issues that will seize the imagination of the public. • Images of Deviancy ed. S. Cohen Penguin 1971

46. Vital to us - hug a hack! • Understand what they want • Ensure you provide it all plus some • Be aware of the needs of the news media at all times • Never say no comment!

47. Reputation • Research in 2000 - definitely affected by bad behaviour, low morale etc • Little or not at all affected by business as usual or ‘good news’ stories • Most ‘relationships’ are built with those who have no consequence • PR must be at a the leadership level • Verčič, D -Trust in organisations: a study of the relations between media coverage, public perceptions and profitability - unpublished doctoral dissertation 2000

48. Reputation • Out of step with messages = inertia • In line = energy • PR is the profession best suited to the business of building loyalty and advocacy CBI • Reputation has grown to represent 70% of balance sheet assets - DTI

49. Relationships’ outcomes Trust (Chia:2005,Rhee:2007) Increased media coverage (Downes: 1998, Jo and Kim:2004) Decreased negative media coverage (Downes:1998, Jo and Kim:2004) Success with political achievements (Kovacs:2003 Wise:2007) Reduced Risks!

50. Bibliography • Greenwood, J in New Activism and the Corporate Response, Palgrave Macmillan 2003 • Onora O’Neill, BBC Reith Lectures, 2002 • Edelman Trust Barometer (2010) • Crowther – Social environmental accounting September 2000 • Holmstrom, S The Reflective Paradigm – Masters thesis 2002 • Dhammapada The Wisdom of Buddha, translated by F Max Muller: Dover Publications 2000 • Bentele, G Bledcom paper 2009 • Regester, M and Larkin, J Risk, Issues and Crisis Management, Kogan Page 2008 • Renn, O. Euprera congress, University of Jyväskylaä, Finland 2010