While it's hard not to be exhilarated by the peaceful revolution in Egypt that ended the 30-year dictatorship of Hosni Mubarak, risk managers and executives at Google might be concerned about the role one of the company's local employees played in that process. Google regional marketing manager Wael Ghonim spent 12 days blindfolded in a prison run by Egypt's secret police after he was identified as a key figure using social media to help orchestrate demonstrations. And when Ghonim was released by the secret police, he went straight to Cairo's Tahrir Square, grabbed a microphone and rallied seemingly demoralized protesters to push on for Mubarak's resignation.
While Ghonim's role as a hero of the first social media revolution does not appear to have hurt the giant Internet company's reputation in Egypt, such activism might not play well for Google elsewhere, especially in authoritarian countries, ranging from China to Zimbabwe.
1. Determining your exposure. This process, says Wilkin, can range from the simple, as in creating a listing of property holdings, to complicated, such as looking at supply chains, to very complicated, such as considering reputational risk. "Look at Google," he says. "They'll need to examine what the impact on their global operations will be of the role played by their manager in Egypt" in the popular uprising. "People Power and social media add a whole new layer of complexity to the political risk equation," Wilkin adds.
2. Quantifying the risks. Companies need to estimate the dollar value that a risk poses to their operations before they can decide how to mitigate the risk, or, if they're buying political coverage, how much to buy.