SYDNEY: Companies in Australia and New Zealand believe that challenges relating to their brands and image are the main risks they are currently facing, a study has shown.
Aon, the risk management group, surveyed 319 executives in Australia and 32 in New Zealand to gauge the trends and shifts they perceived as posing the greatest threats.
Brand and image factors – spanning fields like compliance, ethics, product quality, sustainability and social media – topped the charts on an index score of 5.69 points from a possible seven.
Paul Looker, group manager of Melbourne IT, told AON: "Brand and image will always be up there, because it is the outcome of all the other risks."
In support of this view, brand-related problems have led the table for last five years. The rise of social media and the backlash faced by firms like Qantas and BP after respective crises also demonstrated that major new issues must be contended with.
"Social media is now a key risk tool," Peter Fraser, co-founder of SR7, the intelligence provider, said. "Intelligent organisations are embracing the medium for opportunities and mitigating the risks by using social media command centres."
Elsewhere, concerns tied to the trading environment climbed six spots year on year, taking second place on 5.57 points. The eurozone crisis and questions about growth in China were among the specific matters raised by the panel.
"The marketplace is not longer just Australia," added Steve Kelson, risk manager for Asciano. "People appreciate the interconnectivity of all these things."
Regulation was another topic of growing importance to companies, covering areas including taxation, financial regulation and sustainability. Totals for this issue hit 5.49 points.
Corporate governance also posted 5.49 points. It last assumed equal significance early in the new millennium as scandals stuck firms like Enron and WorldCom. However, the recession and tightening regulation have put it firmly back on the agenda.
"Organisations are now more connected to the global economy and markets through their suppliers, customers, employees and their own operations," Paul Venning, managing director, corporate, at Aon Risk Solutions.
"This evolution has introduced new and increased risk exposures including supply chain risk, economic and foreign currency risk and increased people risks."
Data sourced from AON/B&T; additional content by Warc staff