Companies need courage and vision to manage risk – and the ability to say No

Life is, of course, not as simple as that when it comes to making decisions about the non-financial risks facing a global company, but according to Gary Steel, who opened the second plenary session, ‘companies need courage and vision to manage risk – and the ability to say No.’

Speaking to the theme ‘Global compact: where responsible corporate citizenship meets the challenges of globalisation’, Steel, Executive vice-president, human resources, ABB, outlined the measures his company had set in place in order to manage the non-financial risks it faces; a daunting list ranging from non-compliance through health and safety and environmental to human rights risks.

‘Bad business ethics is bad business’ was the watchword, reflecting the moral imperative of doing business cleanly. Steel placed the risks of noncompliance at the heart of a company’s risk management and culture. The human cost of noncompliance, he emphasised could be very great. ABB took a zero-tolerance approach to non-compliance issues, and had a special investigations unit tasked with following up any breaches. In addition, there was a determined effort to create a culture of risk awareness in every employee, under the motto of ‘Respect, Response, Determination.’

For companies doing, or seeking to do, business in difficult or sensitive countries, security issues were bound to weigh heavily on decision-making processes. Ethically, there was often a difficult balance to be struck. On the one hand, bringing new infrastructure to places such as Afghanistan could be seen to be a force for the good. On the other, the safety of employees, human rights considerations and potential damage to reputation had to be taken into account. The company had a responsibility to send employees home from work ‘in the same state that they had arrived that morning’. However, it was not always possible to have perfect foresight. ABB had lost six employees to a terrorist incident in Saudi Arabia. ‘We did all the right things,’ said Steel, ‘but too late’. That tragedy, he said, still burned, and it was right that it should. Using the best intelligence available and ceaselessly training could mitigate the risk, but not eliminate it.