Risk or Reward?

In a world of shifting reputations, radical transparency and business uncertainty, corporations are held to a higher account: a glimpse into enhanced strategic reputation and risk management. Reputation risk has long been explored by academics, practitioners and professional bodies alike. In the last few years, senior leadership attention towards the topic has increased significantly.

In partnership with the European Association of Communications Directors Working Group on Regulatory and Reputation Risk, we set out to explore new directions in reputation risk and recently conducted a pan-European study on the topic. Unsurprisingly, we found that reputation risk management is considered to be essential and has significantly increased in importance. How it is mitigated and managed varies across organisations, but here are some key, general learnings that are readily applicable:

Risk classification

Reputation risk management is an essential management imperative regardless of current levels of reputation strength

Reputation risks can arise from operational risks and how they are managed

Overall reputation risk and specific reputational risks can be simultaneously quantified, assessed and managed.

Internal versus external risks

Internal sources of reputation risk cannot be ignored, and will receive much more attention in managing reputation risks in the future

Internally, leading firms are getting better at understanding reputation from an employee perspective and building reputation risk resilience across the workforce

Good governance, ethical business and compliance have great upside reputation value potential, as well as mitigating factors in reputation risk management.

Reputation intelligence

As the media and social landscape continues to present complexities for businesses, effective monitoring tools are a necessity for any business

As the ways in which we measure reputation become more advanced, ensuring that firms have the capability to analyse this data, and translate it into actionable insights, will be important

A combination of quantitative and qualitative research is key, with ongoing, in-depth monitoring of stakeholder expectations and experiences as a business imperative

Businesses should not lose sight of internal sources of reputation risk, so due emphasis should be placed on tracking internal reputation.

Businesses should not lose sight of internal sources of reputation risk, so due emphasis should be placed on tracking internal reputation.
Dennis Larsen

Risk governance

There are a number of universal principles on reputation risk protocols and governance standards, including: establishing who is responsible, ensuring adequate reporting and oversight, and considering how it fits into the wider landscape of business risks

Having a process for co-operation between the communications function and other business functions on reputation risk is essential

Businesses have improved over the last five years at putting reputation risk management procedures in place, but there is still work to be done

Effective reputation risk management through effective protocols and governance can ultimately be an important business enabler.

Culture

Ensuring understanding amongst employees regarding the role they play in reputation risk management, and putting in place the relevant expertise, is a significant part of cultivating an effective risk management culture.

Leadership

Reputation risk is ultimately a collective responsibility but one that requires strong leadership and accountability at the top

The rapidly changing external landscape has made it business critical to have sufficient management awareness and reputation risk management capability in place

You can read the full article here, and please get in touch with us to request a session to share more in-depth results and explore how you can enhance your organisation’s approach to reputation risk management.

Events were held on this topic in Oslo, London and Rotterdam with EACD. New events are planned in Zurich (TBD) and Dusseldorf (TBD).

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