Managing Strategic and Reputational Risk - UK-OAR335

You will learn how management is expected to manage the strategic and reputational risks facing their organizations, and how to make effective recommendations for improvement.

Objectives

Managing Strategic Risk Introduction and course objectives

Demystifying strategic risk:

• What is strategic risk?
• Learning from business failures
• Case study
• Strategy in context: the corporate governance perspective
• Satisfying investors, regulators and other stakeholders
• Roles and responsibilities

Strategy development and execution:

• Vision, mission, values and strategy
• Examples
• Key stages in the strategic planning and implementation process
• Who does what? Focus on process or content

Environmental scanning and development of strategic options:

• Understanding the principles
• Tools and techniques (PESTLE, SWOT, stakeholder engagement; scenario planning and reverse stress testing)
• Typical weaknesses of this stage

Evaluation of options and selection of strategic Direction:

• Strategy ‘due diligence’: upside and downside analysis
• Guarding against ‘group think’: promoting challenge
• Internal and external risk drivers
• Case study
• Organizational capability and resource adequacy
• Formal approval – or ‘rubber stamping?’

Communication of strategy:

• Obtaining ‘buy in’ internally
• ‘Top down’ and ‘bottom up’ calibration
• Stakeholder communication: who counts?
• Exercise

Implementation of strategy:

• SMART target setting
• The impact of remuneration and incentives
• Operational alignment with strategic goals

Monitoring strategy execution:

• Board and management information: how much is enough?
• Selecting the right KPIs
• Developing Key Risk Indicators (KRIs) to track progress
• Exercise
• Avoiding ‘tunnel vision’: hints and hazards
• The importance of leadership style and organizational culture
• Challenging strategic direction: do we need to change course?

Assessing, responding to and providing assurance on strategic risks:

• Assessing and prioritizing risks
• Deciding on risk responses
• Resilience through contingency planning: anticipating unmanageable risks
• Monitoring and assurance: The Three Lines Model

Reporting of strategic risks:

• Internal reporting
• External disclosure requirements and emerging best practice
• Sample disclosure statements

Managing Reputational Risk

Reputation risk unravelled:

• What is reputation?
• Why is it such a valuable asset?
• What makes a good reputation?
• Reputational risk: risk or impact?
• A public relations or risk management exercise? Why clarity matters
• Why manage risks to reputation?

Identifying risks to reputation:

• Learning from reputational disasters
• Case studies
• Key drivers of reputation and sources of reputational risk
• Stakeholder mapping
• Exercise
• Some considerations (including pillars of legitimacy, sectoral collateral damage, portfolio change risks, brand versus reputation)
• Exercise
• The CEO’s pivotal role
• Case study
• Mind the gap’: Identifying your reputational hotspots

Assessing reputational risk:

• A qualitative or quantitative approach?
• Assessment challenges
• Handling threats and opportunities
• Case study

Strategies for managing risks to reputation:

• The key goals of reputation risk management
• Risk response options
• Exercise
• Making reputation risk everyone’s business
• The impact of social media: exploiting it to your advantage
• Case study
• Crisis management: the essentials

Reputation risk monitoring and assurance:

• Spotting the early warning signs: the reputation risk barometer
• Developing KRIs
• Exercise
• Building confidence: how do you know it’s working?
• The assurance options: self-assessment, audit and external verification

Spreading the news:

• Internal risk reporting
• Communicating to stakeholders
• Sample disclosure statements
• The power of transparent disclosure

Towards a sustainable reputation:

• Hallmarks of a good reputation
• Overcoming barriers to effective reputation risk management
• An ‘inside-out’ and ‘outside in’ approach
• Case study
• Eight steps toward a sustainable reputation

Putting it all together:

• Dos and don’ts for managing strategic and reputational risk
• Getting started: top tips and quick wins
• Conclusions and next steps