Fundamentals of Risk Management

Reputation and the business model 
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Positive reporting on corporate social responsibility issues can be a significant 
benefit for an organization. This will be especially true when the organization 
operates in an area where the public is suspicious. The public may not be sympa-
thetic towards an organization, because of perception of the business sector and/or 
the organization itself. When an organization operates in a sector that does not have 
universal public support, there may be benefit in producing an ethics policy. The 
importance of the ethics policy will be reinforced if the organization also undertakes 
an ethics audit.
For example, a sector that does not have full public support is gaming and 
gambling. Therefore, organizations operating in this area should seek to enhance the 
reputation of the sector by working with competitors on social responsibility stand-
ards for problem gambling. An individual organization can then gain further benefit 
by being able to demonstrate that it exceeds the minimum standards established for 
the sector.
Many organizations now include comment on corporate social responsibility in 
their annual report and accounts, and some produce a separate CSR supplement.
The production of a report on corporate social responsibility activities enables the 
organization to gain advantage from the CSR agenda.
Where an organization has a positive story to tell about CSR achievement, it
will have taken a CSR agenda from the need to reform to the position where the 
organization can demonstrate that it does conform. The next stage in this 
developing sophistication is for the organization to demonstrate that adherence to
a CSR agenda enables it to perform better and more successfully fulfil stakeholder 
expectations.
The annual report should:
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include information on social-, ethical- and environmental-related risks and opportunities 
that may significantly affect the company’s short- and long-term value and how they might 
impact on the business;
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describe the company’s policies and procedures for managing risks to short- and
long-term value arising from social, ethical and environmental matters;
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include information about the extent to which the company has complied with its policies 
and procedures for managing social, ethical and environmental risks;
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describe the procedures for verification of social, ethical and environmental disclosures, 
which should be such as to achieve a reasonable level of credibility.
reporting on corporate social responsibility

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