“When a crisis hits, does the board have a simple to understand and completely credible story to their stakeholders, validating their good governance practices and attesting to their prudent stewardship of the company? Whatever steps they have taken over the years to manage reputational risk, do they have third party warranties, in the form of insurance policies, that help them communicate that narrative persuasively in the court of public opinion and mitigate the usual post-crisis onslaught of litigators, regulators, and social media trolls?”February 12, 2018
Risk & Insurance
“Can (stakeholders) separate the person from the company in their own minds?”
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?