According to the report “Executive Perspectives on Top Risks 2019”, energy and utility companies rated organizational risk to have a ‘significant impact’ on operations in response to the following statement: “Our organization’s culture may not sufficiently encourage the timely identification and escalation of risk issues that have the potential to significantly affect our core operations and achievement of strategic objectives.”
Interestingly enough, when asked about reputational risk such as social media, energy and utility companies responded with a ‘potential impact’ rating.
What every company must realize is that in a See-Through Economy, social media is directly tied to reputational risk, which is in turn tied to the achievement of strategic objectives, and often related to cyber risk.
Deepwater Horizon Drilling Unit on Fire, Wikipedia
To drive home the importance of these emerging risks, I revisited some of the biggest scandals in the energy industry, such as the Merrimack Valley Gas Explosion, the PG&E electric fires, and of course, the Plains All American Pipeline Spill. Each of these mishaps carried immense reputational risk, and more importantly, were 100% preventable because they stemmed from severe negligence.