A major multinational manufacturer engaged FPL Advisory to identify the risks to the Australian business with respect to government decision-making, actions and events.
Risk Analyst, Allana Ferguson updates us on the challenges created by government uncertainty in this case study.
The corporate affairs team of an ASX200 company was stretched to capacity and required a renewed analysis of risks to the business with respect to government decision-making in their external operating environment. The team had recently expanded and was looking to provide the new senior member with an independent and holistic assessment of how government could impact the organisation and the broader sector. Increasing regulatory burdens from ongoing legislative reform and an upcoming state election had created an uncertain environment that was challenging their forward planning.
Risk by its nature is difficult to manage as the future can never be guaranteed, especially when it comes to government decision-making. Referenced against our repository of risk indicators as part of our Risk Review methodology, we were able to assess the likely challenges the business would face in terms of regulatory, operational, political and reputational risk when faced by this uncertainty. Risk management is not a new concept to the private sector in an operational context, but organisations can often remain risk averse or unaware of the impact of government decision-making if this is not incorporated into their internal risk frameworks.
The manufacturer had a complete and comprehensive point in time assessment of the external risks to their organisation and a framework to assist in managing those risks. In response to one of the identified reputation risks, the organisation undertook an informed government engagement program. The new corporate affairs team member remained abreast of potential government decisions affecting the business. By supporting the corporate affairs team to translate the external environment to the broader organisation, critically, in a top down approach, the Risk Review provided a mechanism for the team to ensure that the rest of the organisation had visibility of the ‘government risks’ in play and what their roles were to assist in managing those risks.