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Risk (Trust) Assessment is Fundamental in the new Trust Economy

Risk and Trust go together – especially where Trust itself is at Risk!

Take the recent damaging revelations about tax avoidance by one of the big banks or the lack of comparison by price comparison websites. 

Did a major bank consider (risk assess) the likelihood of their offshore activities being perceived as tax avoidance and did they contemplate the impact on their business objectives?

Did Energy Comparison Companies question the likelihood of consumers not being too happy that the comparison was less than comprehensive and did the Energy companies think customers would think it ok if they paid a commission to be favoured? Did they think it necessary to manage the risk?

Probability of discovery is one thing. In both cases discovery was more likely than ever before given the confidence in whistleblowing and the growth of scrutiny.

But what about the other variable in the risk equation - Impact? Where Trust itself is the issue, impact will not only depend on the nature of the event but also on the prevailing level of consumer and shareholder trust.

If trust is already high, then a single occurrence may be forgiven or even understood – passed off as a ‘blip’ or aberration. If it is already low (as in the case of the banks and energy companies), then further evidence of mistrust will sink it lower or worse.

Low trust is a bit like a suspended sentence – it is time to think carefully about the consequences of further failing stakeholder expectation.

Dame Collette Bow, the Chair of the new Bank Standards Review Council, puts Risk Assessment at the head of things for Banks – ahead of the usual get fit list – better leadership, culture, customer service and so on http://dailym.ai/1wFhGPv.

Of course, some of the misjudgements and scandals of recent times have occurred a long way from the Board Room and whilst Strategic Risk Management should guide delegated decision making, something more operational is needed day to day. The Trust Audit and more fluid, Dynamic Trust Assessment have similar criteria but are applied at different moments for slow and fast time decision making.

The Trust Economy encourages business planning and operation to be deliberate about building trust.  This and a range of tools and techniques is the subject of a two day CPD course hosted by the University of Liverpool in London at their new campus in London.

Build Trust : Reduce Risk - Managing the Human Factor in Business Crisis, Risk and Resilience

http://www.liv.ac.uk/study/london/programmes/cpd/build-trust-reduce-risk/

 

Mr Simon Merry.  simon.merry@thetrustbusiness.com

Director The Trust Business

http://www.thetrustbusiness.com

https://twitter.com/trustbus

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