Opportunity (or upside) risk arises from a lack of knowledge, capacity or capability to maximise potential opportunities. As opposed to direct losses, it considers the benefits missed. This would commonly include missed opportunities for funding partnerships or incentives, to develop a submission or have a voice on key policy changes, or to build and contribute to stakeholder relationships that result in early or insightful information channels. Beyond just proactively treating risks, opportunity risk acknowledges the other sides of the same coin.
Risk indicators include:
- Thought leadership
- Government partnership
- Stakeholder and Government Engagement
- Proactive involvement in emerging policy issues
Organisations are commonly at risk where they rely too heavily on media alerting them to issues or changes rather than having well developed relationships that draw their attention early. Once issues are in the media there is usually an extremely small window in which to contribute sector-specific knowledge or expertise. Even where organisations are involved in formal consultation this is usually late in the policy or regulation development phase and the momentum will already be directed in a particular way.
A lack of proactive opportunity risk management can leave an organisation exposed to decisions that don’t consider the organisation’s specific circumstances. The lack of early issue commentary or engagement will also often mean the organisation is less likely to be seen as a leader and will have a harder time positioning as such into the future.
Explore More Risk Categories
Focused matters such as electoral cycles, government stability and other localised political events.
Where a change is policy creates new conditions on operations.
Where government decisions disrupt business inputs required for normal business operations.
Reputational & Conduct Risk
Can erode an organisation’s ‘licence to operate’ and hamper an ability to engage with stakeholders.
Created through failure to address or enforce critical compliance criteria which could trigger an escalated government response.
Manifests when there is limited organisation wide visibility which means the organisation is unable to realise available opportunities.