Gerard Lancner, Amrae chief executive and head of risk management, insurance, internal audit and regulatory matters at Yves Rocher, says dealing with a tricky economy is paramount
Competition risk and the Eurozone crisis
As well as dealing with a difficult economic landscape, we need to think about growing our markets. It’s important to maintain an optimistic outlook and pursue the development of our companies. One of the risks inherent in this approach is competition, particularly from emerging markets. This includes the BRICs (Brazil, Russia, India and Chine), as well as the next 15 biggest economies. These markets are strong, they are ready and they have a growing influence on the world stage. Many of these new players will seek to profit from the economic problems that we are experiencing in the West.
Legislative and regulation changes
Another preoccupation for risk managers is the complexity of new judicial and legislative constraints. Companies have to spend time and money to make sure that they respect these new regulations. In turn, regulators should ensure that these laws apply to everyone who does business within a particular market, and not just the companies that are based there. Externalisation isn’t viable for most companies or the economy in general, so regulators have to ensure that there is a level playing field for all businesses that operate in the market.
Regulators have to ensure that there is a level playing field for all businesses
Image and reputation
Image and reputation is also a very important risk for companies today. There is a huge demand for information in the world we live in as the media and modes of communication have evolved over the past 10 years. It is becoming much more difficult for companies to anticipate and manage the media’s reaction to an event. Whatever happens it will quickly spread through the global media where it is out of your hands as a company. Even businesses who are attempting to use social networks as a means of improving their reputation often get more criticism than compliments.
Demographics
Another potential risk that risk managers need to be vigilant against is the human aspect, that’s to say social and demographic risk. Many societies have a serious disparity between the rich and the poor. Many people do not have access to either work or natural and cultural resources. This causes tension and has the potential to create social unrest, for example, demographics were a major factor in the recent Arab Spring.
No comments yet