Qantas Discuss Social Media Strategy Risks
13th Apr 2015
Risk and audit manager for Qantas Group, Andrew Monaghan spoke recently about the external risks social media might carry to a company like Qantas during the Evolving Risk roundtable hosted by The Australian Financial Review and KPMG.
In his speech, Monaghan said social media should not be viewed as a risk, but rather as an opportunity. He pointed out that individuals on social networks can enable Qantas to better shape a message for its customers.
According to Monaghan, most social media external risks are just a force multiplier of some older risks.
Speaking about the possible external threats, Monaghan explained that they have always been a problem in the news and will continue to be in the future.
On this, he said:
"These sorts of risks aren't new or re-emerging from the past, they're coming in through a new mechanism and that's technology today."
Asked if the technology is responsible for massive disruptions and if we are at some sort of an infection point for corporate Australia Monaghan said:
"It's how companies evolve. They're put under pressure from competitors with a new technology or a new way of doing things and they adapt or die. Disruption risk, although it's a bit of a contemporary thing being talked about in business today, has always been on the risk profile of organizations whether it's formally written on a bit of paper or whether it's the board and senior management considering what is the strategy for an organization and where it is going."
Is a CRO (Chief Risk Officer) Necessary?
One of the important questions Monaghan tackled was the need for a CRO (chief risk officer) in a company.
For Monaghan, that need is different from one business to another and depends on its nature.
"For Qantas, we've got two board subcommittees. One the audit committee, which every organization needs and we also have a specialist board subcommittee that looks at health, environment, security and safety"
Speaking about the operational side (planes and flying in Qantas' example) Monaghan said there a few roles with individuals in them who are answerable for a number of specific responsibilities.
"The airline industry is highly regulated and we work very closely with the regulator to address all our operational risks."
Qantas itself does not have a chief risk officer, but according to Monaghan:
"The board is quite engaged in the risk profile of the business."
How Qantas is Evolving Strategy Risk
A good example of Qantas Airways developing strategy risk was the decision to make an arrangement with Emirates and switch to a one-stop service through Dubai to Europe.
Regarding this, Monaghan said:
"Risk was assessed and done through the lens of the proposition for customers, having a one-stop into Europe rather than two-stop. That was the main proposition, plus having a partnership with a major airline that has a good growth trajectory."
Another case of evolving strategy risk was retiming Qantas flights into Asia as a result of their decision to fly via Dubai.
"They were retimed to really help people doing business in Asia from Australia or vice versa, whereas prior to that, arrival and departure times were around flying back into Heathrow. It was risk-assessed in the strategy and commercial space, and risk is a consideration in those decisions: risk to the customers and risk to the investment."