LSBM302 - Teneo Case Study: Evaluating Corporate Risk Management

This case study analyzes the corporate risk management strategies of Teneo, a public relations and advisory firm, following the resignation of its CEO due to an ethical incident. The report identifies key risks faced by Teneo, including financial, reputational, cross-cultural, market, legal, and issue-based risks. It assesses these risks using a risk register framework and proposes risk response strategies, such as strategic alignment, quality service commitment, and cultural realignment. The analysis also employs the Robson Risk Management Model to highlight gaps in Teneo's risk management processes. The study concludes that effective crisis management and corporate governance are crucial for mitigating risks and ensuring the long-term stability and reputation of the organization.

Corporate Risk Management

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................3
MAIN BODY...................................................................................................................................3
2. ASSESSMENT OF RISK............................................................................................................3
Major risk for Teneo....................................................................................................................3
Classification of the above explained risk for Teneo within using risk register framework.......4
3. RISK RESPONSE.......................................................................................................................6
4. CONCLUSION............................................................................................................................8
REFERENCES................................................................................................................................9

1. INTRODUCTION
Corporate risk management refers to the strategies and methods that has been used by the
company in order to mitigate the risk. There are certain type of risk that can affect the business to
the highest level. The current study revolves around the Teneo company that has currently faced
the numerous risks due to an incident. Teneo is public relations & advisory company it eas
founded in June 2011 by Declan Kelly (Liu and Leng, 2019). The organisation has the strategy
of ensuring the effective services to the clients within maintaining the cross-disciplinary
approaches. The given case study has shown that, in July 2021, Declan Kelly who is the chief
executive of the company has resigned from the company when DD’s Arash Massoudi & FT’s
Andrew EdgecliffeJohnson said that, he had touched the number of women in an inappropriate
way during the charity event. After this incident and resignation of Kelly the company has faced
the certain risk that results in heavy loss for the firm.
As stated by Odor, (2018) maintaining effective organisational culture that ensure morals
and ethics towards the people are important. This crisis has impacted the company in high
manner. This incident clearly depicts that, the ethics and morals has not been maintained. Also,
there was high dependency over the leader in the company. Therefore, after the resignation of
leader the firm has faced the certain loses. This report will illustrate the key risks that has been
faced by the company and the assessment of the risk will be done. Also, the report will highlight
the ways in which risk can be managed.
MAIN BODY
2. ASSESSMENT OF RISK
Major risk for Teneo
Assessment of risk is the proper method that analyse and evaluates the risk. Here are the key risk
for the business after the incident and resignation of the CEO.
Financial risk- This risk refers to the probability of losing the money in the business as a result,
the liquidity in business becomes low (Wang, 2020). As the case study has shown that, the client
has cancelled the contract after the revealing of incident. This clearly depicts that, the company
has faced the financial lose. Also, there is the high risk that the major investors of the company
can take their shares back from the company.
Reputation risk- This risk refers to the damage towards the image of the business. The major
aspect that has been highlighted from case is that, the reputation of the firm gets highly damaged.

The unethical behaviour towards the women at the event leads to harm the goodwill of the
company (Hirsch, 2018). There is a high risk that, the NGO centres prepares the campaign that
can provide high damage to the image of the company.
Cross-cultural risk- This risk refers to the miscommunication among the members in the
organisation that can lead to put the human value at the stake. There was high dependency over
the leader in the company (Firsova and Vaghely, 2018). When the CEO has resigned, many
employees also finalized their resignation without communication with the different members of
the boards. Thus, this shows that the miscommunication among the members. This lead to affect
the internal relation of the Teneo.
Market risk- It includes the loss of market share in the market. This implies the direct effect on
the over-all performance of the firm. The image of the Teneo has faced the damage this may
further lead to loss of market share in the market. Also, the consumers of the company leads to
Boycott the firm. This risk is extremely high for the business as the market share decides the
over-all performance of the business. The investors, debentures, consumers external authorities
and so on all of these groups deals with the firm on the basis of their market status (Jiao, Liao
and Zhou 2018). Thus, this is one of the high risk for Teneo.
Legal risk- This risk has been considered as the financial & reputational loss of the business due
to the lack of awareness. The allegation has been made over the CEO of the firm after many days
of the actual incident. The people who reveal the truth has not revealed it before. No cross-
checking has been done by the other directors as well. In such situation there is high interference
of the government towards the operations of the company.
Issue-based risk- This has been determined as the combination of all risk. It refers to the
identification of the risk from the task, issue or course of event that can affect the major
operations of the firm (Arun, Cuomo and Gaur, 2019). All the risk are concerned with this risk
for Teneo as the services of the company gets highly affected due to one issue. This risk is
mainly associated with the change in management. Now, there is a requirement for changing the
internal curriculum of the company. This further leads to open up new challenges for the
company.
Classification of the above explained risk for Teneo within using risk register framework
Risks involved Category of Probability of Impact of the Current status Final risk

risk the risk risk on the
business
of the risk assessment
Financial risk Profit related High High High Needs to be
mitigate soon.
Reputation
risk
Business
management
risk
High High High Teneo needs
to capture the
brand image
again.
Cross-cultural
risk
Internal
management
Moderate Low Moderate Change in the
policies of
company is
required.
Market risk Consumer
related risk
High High High This risk
needs to be
response as
soon as
possible.
Legal risk Governance
risk
High High High Actions have
to be taken by
the
organisation.
Issue-based
risk
Operational
based
High High High This risk is
affecting the
operations of
the company
therefore, the
faith of the
public towards
the

organisation
has to be gain.
3. RISK RESPONSE
From complete and detailed evaluation after considering the case study, there are varied
risks that have been identified such as reputational risk which the threat and danger to the
goodwill and brand image of the establishment in front of their competitors. In the case of
Teneo's, it had been occurred because of the direct actions occurred within the firm. In order to
mitigate them the firm have to focuses towards strategic alignment by focusing over the
company in order to sustain their reputation begins at the top with effective board oversight, and
integration of risks into strategies (Gericke and Torregrosa, 2018). Quality service commitment,
operational focuses and organizational resiliency are some other considerations in order to
mitigate reputational hazards. Another risk is related to financial risk which possibly contribute
into loosing money over an investment and even business venture. In order to palliate them,
development of solid plans, keeping good and detailed records, limit down loans, diversify
income sources and perform quality control tests are few elements to handle such crisis. Third
risk is related to the cross cultural risk according to which certain situations have been occurred
within the Teneo's due to which the problem arises because of the mis-communication which
further lead to human values at stake. In order to handle this, the Teneo's have to realign their
culture strong culture is enough to manage compliance in a proactive and holistic manner and
also contribute towards lowering costs, enhance effectiveness and sustaining reputation specially
at the times of trouble. Fourth is issue based risk which is completely based upon specific issue
and in the present case, Teneo's have to monitor and control risks and their issues properly in
order to resolve them at utmost priority manner. Next is the market risk which has been faced by
the firm because of their various cultural issues that have been arises. This can be alleviated
automatically by maintaining positive culture regarding compliance (Gouiaa, 2018). The last one
is related to the legal risk which has been faced by the firm after their actions as this risk is
directly related to the reputational and financial risk. In order to relieve them, enterprise have to
make appropriate culture which highly follows laws and regulations regarding compliance and
greatly perform strong corporate values that helps to avoid any kind of pessimistic activities
within the firm.

In order to illustrate the gaps that have been occurred within the Teneo's, it had been
evaluated that at the primary stage of personal risk perception, the management and other board
of members are unable to prepare appropriate risk management plan due to which at the second
stage, they are not able to identify the risks involved within it. This is the major reason that the
other board of members is solely dependent upon the Declan Kelly's leadership and not
appropriately fulfil their desires of time evaluation of risks that are involved within their policies
and regulations (Dashottar and Srivastava, 2021). This also continues to become a gap or
drawback at fourth stage as well as the firm is not effectively able to prepare strategies as they
choose to avoid that risk which become huge at the end of the procedure. And at the end, the
Teneo's management was not able top evaluate risk which is most ignoring event within the
establishment.
Hence, the company requires appropriate governance of risks that are associated within
the Teneo's as the governance includes the complete system of rules, standards and practices that
guide them to adopt effectual patterns to run their business activities efficiently. This helps to
identify potential hazards in previous manner and act accordingly to reduce or eliminate their
long term along with financial implications (Agyei-Mensah and Buertey, 2019). In context of
regulatory risk, it has been evaluated that changes in rules and regulations that materially impacts
the security level of the firm in order to sustain within the existing market under which various
other competitors exists. With appropriate risk administration, the company is able to regulate
their hazards in successful manner. This will help the Teneo's to enhance cost of operations,
Robson Risk Management Model

introduce legal along with management of hurdles that even constitute of restrict the firm
strategies to maintain decorum within the establishment.
4. CONCLUSION
From the above report it has been concluded that, crisis management is an important
parameter that can leads to solve the different perspectives of risk. This is the proper
management that starts from the identification of the root the cause the risk. As identified in
report that, the incident has occurred due to ineffective policies of the organisation. With
inappropriate risk management within their organization, the firm have to face varied risks which
were always neglected by the board of directors within the Teneo's. The avoidance of risk
generates a lot of issues which should become the central part of any business strategic
administration. Proper risk management at appropriate time will help them to identify the risks at
particular time duration and address those risks which can initially be handles by the
management committee. Hence, the study had concluded appropriately about the significance of
crisis management as without proper administration and inappropriate strategies, the Teneo's
faces various uncertain conditions and also unable to predict their future action in fruitful
manner.
Thus, in order to minimize the crisis faced by the Teneo's events, the administration of
the firm have to adopt certain actions which completely follows corporate governance as it is a
basic structural framework from which effective risk management takes shape. With the help of
this strategy, the roles and responsibilities have been divided into diversified people of an
organization and also each and every person is well aware about the things that is going within
the establishment (Pidgeon and et.al., 2018). Thus, it reduces the chances of any wrong doings
within the establishment. It increases the transparency, accountability, fairness and independence
level among the Teneo's which automatically help other board of directors to evaluate the risks
that they are going to face because of the actions performed by the Declan Kelly. Moreover, their
dependency over the one leader is also acted as wrong decision which comes in front of them in
most crucial manner and costs a lot even reduces the overall brand value along with a lot more
financial as well as legal losses.

REFERENCES
Books and Journals
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reporting framework in India: a Blockchain application-based approach. Journal of
Banking Regulation, 22(1), pp.39-51.
Firsova, N. and Vaghely, I.P., 2018. Strategic Options to Cultural Risk Management: A
Theoretical Framework.
Gericke, R.C., Gericke and Torregrosa, 2018. Corporate governance and risk management in
financial institutions. Springer International Publishing AG, part of Springer Nature.
Gouiaa, R., 2018. Analysis of the effect of corporate governance attributes on risk management
practices. Risk Governance and Control: Financial Markets & Institutions, 8(1), pp.14-
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