December 20, 2018

The disaster unleashed huge quantities of mud and waste that destroyed a nearby village and killed 19 people.

It would resolve shareholder claims stemming from the Nov. 5, 2015, bursting of the Fundão dam in Minas Gerais, Brazil’s main mining state, at a mine run by Samarco, a joint venture between BHP and Brazil’s Vale SA.

The Anglo-Australian mining company’s preliminary settlement of class action litigation led by two Alabama pension plans was filed on Wednesday night with the U.S. District Court in Manhattan.

BHP Billiton Ltd. has asked a U.S. judge to approve a $50 million settlement of claims that it fraudulently inflated its share price by overstating its ability to manage safety risks before a fatal 2015 dam burst at a Brazilian mine.

December 20, 2018

”…inflated its share price by overstating its ability to manage safety risks.”

Foreshadowing future reputation risk litigation, “plaintiffs claim that defendants (BHP) made actionable misstatements regarding the Company’s commitment to health and safety (and) the adequacy of the Company’s safety, risk management, and monitoring protocols…”

Reputation risk: gap between expectations and reality.

Reputations are valuable strategic intangible assets. Threats to these assets⏤ enterprise reputation risks, often mislabeled “brand risks” ⏤ need to be managed, and management needs to be overseen through reputation risk governance lest reputational damage or reputational harm result in long-tailed go-forward losses in economic value and/or political power. Because these intangible risks arise from the interplay of stakeholder expectation, experiences, and media amplification, parametric insurances for intangible asset risks, for reputational value, for reputational harm, and for reputation assurance help mitigate risk by telling a simple, convincing and completely credible story of quality reputation governance to stakeholders. This story telling effect is the expressive power of insurance complementing insurance’s better known instrumental power of indemnification.

Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive solution. What’s your strategy?