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help with the question below. I need you to assist by answering briefly and precise. I will share a case study to go through below

 help with the question below. I need you to assist by answering briefly and precise. I will share a case study to go through below before attempting to help answer. So after reading the case study, consider the impact scale and discuss this question. Do you think the impact scale is suitable for the context of Lightning Communications?


In answering the question, suggest ways to improve the impact scale so that Lightning Communications can be better prepared to implement its risk management plan.

Lightning Communications is a large telecommunications service provider listed on the Johannesburg Stock Exchange. It has many stakeholders across South Africa and caters for both private and corporate services. The total client base consists of approximately 40 million customers, the bulk of which are private persons.

The board and executive committee of Lightning Communications have recently engaged in discussions with one of the large retail banks in the country, GS Bank. GS Bank also has a large client and stakeholder base across the country. GS Bank is one of the Southern African Development Community (SADC) region's largest retail banks, and one of the largest three in South Africa. It has a total client base of approximately 16.5 million clients, with 28 million cards in issue (including debit, credit, and petrol cards).

Discussions between the two organisations have focused on the alignment of several mutual interests. There are three critical points of alignment that the GS Bank executive committee has proposed to implement operationally within the next 12 to 18 months:

  1. Lightning Communications will provide location tracking and GPS data of private persons to GS Bank. The idea is that by using this data set, GS Bank can better track the movement of its customers to offer them a better, more personalised service linked with their accounts. This would include retail specials and petrol discounts at specific filling stations, among other incentives.
  2. GS Bank can use this same data for "know your customer" purposes. The argument is that the GPS and location data provide a far more accurate, real-time picture of the actual place of residence of their clients.
  3. Lightning Communications can incorporate a secure payment method for accounts and a scan-to-pay function through its app. Both functions would rely on a pay-gate service using the GS Bank's currently existing secure platforms.

Table 1:Lightning Communications impact scale.

Rating Compliance impact Financial impact (rand operating profit) Legal impact
1
  • Fines and penalties exceeding R10,000
  • Imprisonment exceeding 30 days
  • No reputational impact
  • Minor environmental impact
< R10,000 Major litigation with damages less than R10,000 plus significant costs
2
  • Fines and penalties exceeding R50,000
  • Imprisonment exceeding 90 days
  • Minor reputational exposure (no major press reporting)
  • Short-term transient environmental or community impact
  • Remedial action needed
R10,000 to R99,000 Major litigation with damages less than R100,000 plus significant costs
3
  • Fines and penalties exceeding R100,000
  • Imprisonment exceeding six months
  • Fair reputational exposure (local press reporting; single event)
  • Medium-term effect on environment or community; and required to inform environmental agencies
R100,000 to R999,000 Major litigation with damages less than R1 million plus significant costs
4
  • Fines and penalties exceeding R350,000
  • Imprisonment exceeding 12 months
  • Fair reputational exposure (local press reporting; short-term coverage of 5-7 days)
  • Prolonged environmental impact; high-profile community concerns raised requiring significant remediation measures and management attention
R1 million to R9,9 million Major litigation with damages less than R10 million plus significant costs
5
  • Fines and penalties exceeding R1,000,000
  • Imprisonment exceeding 18 months
  • Significant reputational exposure (national press reporting; medium-term coverage of 14-30 days)
  • Executive pressure to resign
  • License implications (warning)
  • Irreversible long-term environmental damage to a highly valued species or location
R100 million to R999 million Major litigation with damages less than R1 billion plus significa

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