Communicating risk in a complex world
The Lloyd’s Register Foundation Institute for the Public Understanding of Risk (LRFI) organised an industry sharing session on “Risk Communication in the Real World” on 17 January at the Lee Kuan Yew School of Public Policy at NUS. The event saw distinguished speakers Mr Peter Ho, NUS Trustee and Senior Advisor at the Centre for Strategic Futures; Professor Richard Clegg, Chief Executive of Lloyd’s Register Foundation; and Ms Lesley Cordero, Senior Disaster Risk Management Specialist at the World Bank Group share their insights on risk and crisis communication in an increasingly complex global environment.
Mr Ho spoke about the Tōhoku earthquake in Japan and the flooding in Thailand, two catastrophic events that marked 2011 and emerged to be among the most costly natural disasters in history. He argued that these events were not black swans, a term coined by Nassim Nicholas Taleb to describe rare and hard-to-predict events with great impact. Instead, Mr Ho referred to them as black elephants — the proverbial elephant in the room that is visible to everyone but which no one wants to deal with and so pretend as if it does not exist.
“The reasons why they are often overlooked or underappreciated are centered on a special type of failure that all human beings are prone to and these are our cognitive biases or blind spots. It is deeply embedded in our human nature,” said Mr Ho.
He added that this was compounded by globalisation which has resulted in an interconnected world where small disturbances in one part of the world can lead to large effects in another — the so-called butterfly effect — making it very difficult to predict and plan for such extreme events.
“We cannot eliminate every risk but we need to manage them in such a way that the strategies and their premiums do not all have to be front-loaded. The reality is that agreement on what constitutes the greatest risk must be reached through consensus and communication. Without that consensus it will be difficult to allocate resources to mitigate these large risks…the alternative is to wait for a disaster to strike before action is taken and by then, of course, it is too late,” said Mr Ho.
Prof Clegg and Ms Cordero
Prof Clegg shared case studies that demonstrated poor public understanding of risk. He cited the example of Tokyo’s ageing Tsukiji fish market which was due to relocate to a new state-of-the-art facility. However, relocation plans were suspended amid public concerns of food safety once it was discovered that the new market was built on soil contaminated with toxic chemicals. Although regulators maintained that these fears were unfounded since the asphalt floor would protect the foodstuff from contamination, continued public mistrust fuelled by negative media reports has resulted in a costly delay in the move.
Finally, Ms Cordero shared her experience managing the Typhoon Haiyan crisis in 2013 as former Undersecretary of the Office of the President of the Republic of the Philippines. She shared that when communicating risk, there is value in being truthful and candid and backing up statements with facts and evidence to enhance public awareness and understanding.
The event was organised in conjunction with LRFI’s inaugural Executive Education Programme “Understanding and Communicating Risks: Fact, Fears and Fallacies” held from 15 to 18 January.
Members of the audience learnt about risk communication through real-life cases
