February 5, 2018

The Fed took the unusual measure of requiring every board director to sign an attestation – not unlike the Section 302 attestation required of CEOs and CFOs in Sarbanes-Oxley – that they understand the cease and desist order. It also instituted a series of timetables for management and board to report on their risk management improvements.”

“The regulator also publicly blamed the board and castigated former chairman-CEO John Stumpf and his successor, chairman Stephen Sanger, for not upholding previous risk management compliance measures that the bank had promised it would. Meanwhile, the bank has agreed to replace four of its current directors.

February 5, 2018
Agenda Week

“Board members need to understand how operational risks impact stakeholders and make sure there’s a solid plan for mitigating those risks.

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?