| Questioning High-impact risks. The question is: ‘The important steps for managing High-impact risks are Identification – determination of urgency – strategy – Investment – Monitoring – Communication. How big should/may the investment be? What is ethically necessary and OK as spending? What are the guidelines and points of attention?’ These questions are relevant because for organizations in the private sectors, the stakeholders in a negative event are not only the shareholders. | In this contribution I write my personal opinion, not that of any organization. |
Author: Manu Steens
Contents
High-Impact Risks: What are they, how do you assess them?
The 2025 Global Risk Report – WEF (World Economic Forum) gives a good idea of the most important ones. These are very rare and usually strategic.
Risk = Probability x Impact is therefore very difficult to determine since there is no empirical experience with the event, and therefore also a very high uncertainty regarding the probability of occurrence. It is therefore better to determine the urgency of tackling the risk as a measure of the importance of the threat, than a classic risk assessment. (Which in itself is also a measure of the urgency of tackling the risk.) I previously wrote a blog about this: https://emannuel.eu/risk/urgency-assessment-in-risk-management/
The nature of the threat can often be used to determine the appropriate measure. But the question then is, regardless of the strategy followed (avoid, relocate, reduce, accept), how much money may or should be spent on implementing the measure.
It is not possible to find a suitable general formula that puts a financial figure on the efforts to be made. What you can be sure of, however, is Pleuris’ law .
Pleuris’s law
Pleuris strength = Blameworthiness x Relevance x (Social Mediagenicness) 2
Can the organization or someone in the organization be blamed? (Blamewortiness).
Is the event about money, children, a serious plane crash, serious pollution of a large area, something with carcinogenic substances or something else very important? (Relevance)
Are the CEO, the board members, one of the victims, famous people? Or do they have a high position? Or have mistakes been made before? (Mediagenicness).
The bigger those three variables, the bigger the social impact!
What Pleuris’ Law teaches us is: be honest and ethical.
What to focus on
What you should not/may not focus on in communication is your own reputation. Reason: if the citizen/customer finds out that reputation management is the first motive for a measure, then you are ethically done for. And then your organization suffers much more damage than necessary. You should rather do reputation management from an ethical perspective. That is the better method to maintain your reputation with a greater chance. The criteria subjects, for the ethical investment are, according to me:
- Man
- Animals
- Plants
- Soil-Air-Water
- (Critical) Infrastructure
- Financial-Economic
- Policy (Politics Company-wide & Geopolitics)
- Cosmos
Man
Before any other criterion comes the securing of the (fellow) human being. These are the employees, the residents, the customers, the patients, in short all stakeholders. This both proactively and actively as reactively. After all, a human life is considered the most valuable. As something that must be preserved at all times and at any price.
Animals
Besides the fact that animals often keep people company, they are also a source of food. But the real criterion is not that, in my opinion. The real criterion is also not: “what does an animal cost?”. The real criterion why one should secure animals in the second instance is the answer to the question: “can they suffer?” And for all animals, even insects, the answer is ‘yes’.
Plants
Plants should be spared in the third instance, because they too are living beings, but not only because of that, but especially because they are not only a source of food, but also a source of healthy living conditions. Indirectly this helps the criteria ‘human’ and ‘animal’ because both need plants in their habitat for a healthy balance.
Soil-Air-Water
Together with plants and animals, a habitat is important. Without that given, life of man, animals or plants is impossible. We are also actually obliged to it and, especially, to future generations.
(Critical) Infrastructure
(Critical) infrastructure must be safeguarded because more people than not are dependent on it. I wrote more in-depth arguments on my blog before.
Financial-Economic
Financial and economic arguments are the most linear, defined arguments that appear in this list. An organizational unit that is twice as economically profitable or financially valuable as another, gets more ‘rights’ to rescue its production activities. That is not unethical in its own right.
Policy (Politics Company-wide & Geopolitics)
Here it is important that the organization can demonstrate that it is prepared for the crisis. It must in fact have plans ready, and reach out to the government or governments (see the Belgian case) to tackle the situation. Ideally, the plan of approach has a general and a specific part for the approach. And the organization can quickly apply a modus operandi. What is correct in terms of policy is that the damage is optimally repaired according to the above criteria. The question here is ‘What is the ethically right thing to do?’ and ‘Are we taking enough measures, including aftercare?’ and ‘are the financial efforts realistic?’.
Cosmos
This is safe from harm for most organizations for the time being because they do not exploit it. But that is changing as we see with SpaceX. Pollution of the cosmos makes it more difficult, perhaps even impossible, for future generations to explore space. So it can be added to the list.
Questions that are also addressed are: ‘What is happening?’, ‘What additional risks are there now?’, ‘What is working against us, and what is helping us?’, ‘What is required by law?’, ‘What does science and standards tell us?’ and ‘Who does what and by when?’.
Conclusion
It is not the intention that every CRO (Chief Risk Officer) will now read Spinoza’s book ‘Ethics’. However, know that in times of crisis an ethical approach is necessary. Otherwise, the organization that is undergoing or has to combat the crisis is a ‘lost case’. A real formula for an ethical approach is impossible to determine. But a number of criteria here are clear. The decision-makers in the organization must really want to tackle the crisis according to the best intentions. The criteria I gave above can be part of that. Furthermore, it is a matter of giving it sincere substance and giving the best of yourself.