According to a recent Deloitte analysis, companies should view operational risk less as a risk-preventative measure and more as a measured risk enabler. The study makes the case that valuing great ORM intelligence might boost risk-taking and competitive advantage. This strategy also suggests that, as long as it yields greater profits, a certain amount of operational risk is acceptable or even desirable.
This highlights the issue of how companies should strike a balance between ORM’s moral and social obligations and their business’s financial and strategic goals. How can companies make sure that their ORM procedures don’t endanger the health and safety of their staff, clients, stakeholders, and the environment? In the event of operational failures or incidents, how can they prevent reputational harm and legal liability?
Adopting an ORM strategy based on values and in line with the mission, goals, and culture of the company is one solution that might be considered. According to a KPMG study, companies can improve their brand reputation, customer loyalty, staff engagement, and social license to operate by integrating social values into their ORM processes. They can also lessen the likelihood and impact of operational hazards.
Another solution is to adhere to certain basic ethical principles for better ORM, which can direct behaviour and decision-making under ambiguous and difficult circumstances.
Some of these guidelines are as follows, as stated in a report by Dante Disparte in the Harvard Business Review:
When values are inconvenient, they matter the most.
Evil things happen in the dark;
If you see anything, say something; trust but verify;
No one gets additional credit for doing the right thing when it is simple.
Businesses that follow these rules will become more transparent, accountable, and ethical, and avoid falling prey to complacency, rationalization, or opportunism.