Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of ‘doing the right thing’ within a corporation can offset these risks.
Corporate citizenship expert and commentator John Ruggie once said that CSR is one of the ‘social pressures’ companies have absorbed. That’s how we can connect CSR to a process of managing risk and for responding to opponents in competitive business environment. The integration of the discipline of risk management and CSR is two-fold. One of the very common ways to manage risk with the help of CSR framework is to minimize negative impacts by encouragement of positive actions.
Managing and controlling risk is key for organisation’s success. Within the area of CSR an organisation can minimize their risks of supply chain, operational, product and societal expectations. CSR practitioners are adopting the risk managers’ techniques by taking a step by step approach to analyse the problems faced by companies, in order to demonstrate the value of CSR to the business. These risks can be effectively managed with an organisational culture of accountability, transparency and staff involvement in CSR activities. The use of existing business risk management frameworks and strategies can help in providing a clear way to establish CSR in the management of business, shareholder value and communication with key stakeholders.
