Risks

Companies and organizations that ignore or execute poorly in social performance management face the following risks:

• Projects may be delayed or halted because of conflicts with the community. That’s a particularly big issue when the asset is a mine or a forest, something that can’t be moved. In the worst case, the conflict may turn violent.
• Conflicts are prolonged or recurring because companies failed to investigate, understand and address their root causes. 
• Senior managers spend too much of their time trying to “fix” the situation instead of managing the actual projects. 
• Companies can lose money on projects because of the conflicts. Smaller organizations may lose assets and even go under.
• Companies' reputations are damaged; how they conduct themselves in other countries shapes their public perception worldwide.

Opportunities

Companies and organizations that embrace and execute well in social performance management have the following opportunities:

• Effective social performance management identifies problems before they become crises, which keeps projects on track and reduces the risk of conflicts that could be damaging and expensive.
• Companies are able to build relationships of trust and open channels of communication with local communities where they have projects, giving them a competitive advantage over other companies that want to work in the area.
• Companies with successful social performance management track records have enhanced access to funding from international organizations such as the International Finance Corporation or other international financial or development institutions.
• Companies with successful social performance management track records are almost always good places to work and become preferred employers.
• Integrating social performance management into a company's standard way of doing business makes it part of everyone's responsibility, instead of isolating it. And that is the most effective way to assure that initiatives succeed.