Magazine article Management Today

Books: Risky Business

Magazine article Management Today

Books: Risky Business

Article excerpt

With so many big companies facing reputation crises, this timely book identifies how to manage risks. But it provides only half the solution, says Simon Burton.

Rethinking Reputational Risk

Anthony Fitzsimmons and Derek Atkins

Kogan Page, pounds 29.99

Tesco, Volkswagen, BP, Serco, RBS - there seems to be a never-ending stream of companies who have messed up. Yet this is happening at the same time as companies are spending more money on risk management and compliance than ever before in the history of business. So why do things still keep going wrong?

I was working inside one of those multinational companies when they famously screwed up. My experience at the commercial coalface has given me some insight into why the current huge effort on risk management doesn't always reap rewards. And this is a perspective which is shared by the authors of this new book on tackling reputational risk.

Risk management all too often apes the starting point of economics: it is predicated on rational human beings acting in a rational way. But senior executives are not always rational; neither are a company's various stakeholders (investors, NGOs, media or employees). It is this heady brew that can often give rise to reputational risk which, if not anticipated, managed or mitigated, creates the headlines and ultimately hurts the value of the business.

The authors give the reader some classic vignettes of eye-catching corporate behaviour in recent years, and lift the lid on them to try and explain what actually happened. From the aggressive accounting practices at Tesco to the culture at Barclays that led to the rigging of the Libor rate benchmark, from Volkswagen's cheating on emissions testing to Mid-Staffordshire NHS Trust's failure to care for patients - all these and other case studies are forensically dissected in the quest to see what lessons can be learned.

For a topic that can easily be trapped in the abstract and wrapped in jargon, the authors have produced a crisply written tome which is easy and engaging to read. Its format of insights, followed by case studies and then solutions works well. This should be no surprise. The authors Anthony Fitzsimmons and Derek Atkins are well versed in this area - their previous publication Roads to Ruin on behalf of Cass Business School for the insurance and risk industry is rightly highly regarded They bring their experience to bear in this book. …

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