Corporate Issues Management

What is an Issue?

Some have defined an issue as any major environmental trend and possible events that might have a significant impact on the firm. There are other definitions that use “impact” as a way to define issues. But this is insufficient to define an issue in a manner that any organization can act on it. Others tie in the notion of impact with the timing of the issues likely to emerge as shown in Figure 1 (the comments in parentheses are examples of types of issues that could appear or have appeared in the quadrant). The argument is that issues with a high impact on the organization and with a high likelihood of actually occurring are dangerous and should be attended to with great care. Issues of medium impact and moderate likelihood should be monitored for developments, and issues of low impact and low likelihood, while not ignored, should be watched for future developments. This is the most simplistic view of issues but has appeal, as it is a visual way of capturing the complex interactions that occur. Issues are not simple—consider genetically modified organisms. What is the issue here? Is it a trade issue and as such should be resolved by the rules of international trade? Or is it a public health issue and therefore resolvable in regulatory and legislative hearings? Or is it an issue of prevention of starvation of large segments of society?

A crisis is not an issue, but it can be a trigger for an issue to emerge after the crisis is resolved in some manner. Consider the explosion of a Union Carbide plant in Bhopal, India; the sudden collapse of Enron; or the enormous oil spill of the Exxon Valdez in Valdez Alaska. All these events occurred with blinding speed; engaged and affected large segments of society; and [Page 482]demanded immediate responses to limit further damage to the environment, human life, and investors. Issues do not always emerge with such speed and/or breadth of impact. But as noted, the explosion in Bhopal led to interest in legislative measures in plant safety worldwide—and that was an issue for the chemical industry to deal with as a whole. In a similar fashion, the collapse of Enron led to new legislation for the regulation of accounting and reporting and continued interest in corporate governance that goes far beyond the accounting industry. Finally, the oil spill in Alaska led to increased interest in tanker safety and in how organizations respond to such crises.

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