Based on research by Steel City Re, social media messages by an influential person can have a lasting effect on a company’s stock price if stockholders and the public believe the messages will be backed up by action.
“You don’t have to be culpable to be held culpable in the court of public opinion,” he explains. “In this environment, companies and members of leadership need to prepare for a different kind of battle.”
According to Nir Kossovsky, CEO of Steel City Re, “the frequency of strong language and hostile expression [on social media] has increased significantly over the past four or five years.” Additionally, he says reputation loss has doubled in the past year.December 16, 2016
“Companies need to…deploy new strategies to deal with a new level of reputational risk.”
Reputation risk management: mitigating both disappointment and noxious media.
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?