Tag Archives: GRC

Reputation Risk and Conflict Minerals

Respected governance and internal audit expert Norman Marks posted a fascinating article on reputation risk.  He quotes a line from a recent survey that summarizes the main point:  reputation risk is driven by other business risks.  In many ways, he seems to be speaking directly to conflict minerals.  A few of his salient points are below.  Actually, the whole article is so on-point we almost need to quote it in its entirety.

It should be noted that the likelihood of a significant impact on reputation arising from, say, a safety issue is not necessarily the same as the likelihood of other impacts such as fines, lost time, and so on.

In addition, the impact on reputation may be positive while the impact on, say cash flow, is negative!

For example, the decision to divorce the organization from a supplier who is found to have broken the law may adversely impact costs and disrupt delivery of product to the market – while enhancing the reputation of the organization…

… when there is violence in some part of the world, people look to the US, EU, and others for a reaction. It’s not only the action that can affect reputation, but the failure to act

Actions by third parties that are part of the extended enterprise (suppliers, channel parties, agents, and even customers) can affect reputation. This needs to be identified, assessed, and monitored closely as well…

Of course, reputation risk is the basis of the Dodd-Frank Section 1502 conflict minerals disclosure so perhaps there is little surprise that Norman’s comments are so relevant.  Yet in the heat of effort companies are expending for SEC compliance, some may lose sight of this risk.

Reputation risk is a subject we explore specifically and deeply, from many points of view and sources.  We also explicitly drill down into impacts on supplier relationships – both positive and negative*.

Norman refers to the concept of “risk sensing” as a means of identifying and monitoring reputation risk.  We agree – as a matter of fact, given that our experience includes traditional risk management (insurable and non-insurable), this comes naturally to us.

One client has a particular exposure to reputation risk.  We knew this before the engagement because of our pre-engagement research and “risk sensing”.  In reality, this was easy to identify because the company is very well known and recently the subject of significant negative publicity about their core operations.  Because we were aware of this existing situation, significant time was expended discussing potential reputation impacts of conflict minerals matters.  Facilitated discussions took place between many business, communications, PR and procurement leaders (among others), leading the client to a thoroughly-considered conclusion and plan of action.

Norman’s article should be carefully reviewed and considered.  Afterwards, it may be worthwhile to revisit your own assessment of conflict minerals reputation risk.


*  For instance, eliminating suppliers that are not conflict free can result in a consolidation of purchasing power (a positive), but also reduce supply chain resiliency in the event of a disruption, such as what occurred with capacitor manufacturing in 2011 (a negative).

The Elm Consulting Group International, LLC Enters into a Cooperative Relationship with Milo Belle Consultants, LLC

A cooperative client service relationship to integrate Environmental, Health and Safety (EHS) into Governance Risk and Compliance (GRC) consulting services

August 24, 2009 –  The Elm Consulting Group International, LLC and Milo Belle Consultants LLC announce the formation of a cooperative relationship that will augment Milo Belle’s Governance, Risk and Compliance (GRC) services to include Environmental, Health and Safety (EHS).

Chris Maxwell, Milo Belle Partner in St. Paul:  “We are happy to forge an affiliation with Elm.  They bring highly complementary expertise to our GRC services.  We believe our clients are also integrating EHS management into larger internal GRC initiatives.  Elm allows us to bring highly qualified EHS expertise to the table to support those clients.”

“Our business models and philosophy are very similar, so our mutual learning curves will be short,” said Lawrence Heim, Director in Elm’s Atlanta office.  “We both emphasize high quality client service and innovative business thinking, while minimizing internal administrative processes.  We are confident that clients will find the joint Milo Belle/Elm expertise valuable as corporate EHS departments frequently are considered an element of GRC programs.”

About Milo Belle:  Milo Belle Consultants, LLC is a Governance, Risk and Compliance professional services firm.  With a full staff of experienced finance, accounting and IT professionals our team offers comprehensive consulting and staff augmentation solutions to companies of any size. Our professional staff range from former CFOs and Controllers, IS System designers to Project Management experts and Internal Control specialists. We have backgrounds in almost every industry, including renewable energy, healthcare, transportation, non-profits, construction, manufacturing, agri-business, banking, hospitality and software. Milo Belle’s corporate headquarters are in Sioux Falls, SD, with additional offices in St. Paul, MN, Omaha, NE and Denver, CO.

About Elm:  The Elm Consulting Group International, LLC is an environmental health and safety (EHS) consultancy with offices in Connecticut, California, Georgia, Texas, Mexico, New Zealand and Argentina, and clients in over 60 countries.  Our expertise is assisting our clients with the development and deployment of effective EHS management, compliance, risk reduction and sustainability programs.  Unlike most engineering consultants, ELM has substantial experience developing and implementing tools/strategies that directly integrate EHS into internal risk management functions – in terms relevant to clients’ own internally-established and credible risk benchmarks.


Joel Dykstra, Milo Belle Consultants     (605) 275-6527 ext.1018

Lawrence Heim, The Elm Consulting Group International     (678) 200-5220