So, what is the difference between a reputational hit that ends up being just a blip, and one that becomes an extinction level event? Following are five ways to assess your exposure.
Yet new studies are telling us that even after a crisis of major proportions, most companies’ share price returns to normal valuation in months. (Note how quickly Equifax rebounded after its massive hack.)
Moreover, the rules appear to be changing in real time. Where the “Boom Boom Room” was an aberration that took a long time to be taken seriously and then addressed, today almost any whiff of sexual harassment will find bankers on the curb in a nanosecond, as the public’s tolerance for such behavior is plummeting.
From #MeToo to lending to gunmakers, from compliance issues to cyberhacks, from questionable marketing practices to persistent gender inequality — political, economic, and social issues are all directly impacting bank operations and reputations like never before.June 25, 2018
“Today, crisis has almost become stylish, and …if your crisis is in vogue…you are more at risk.”
No person, company, institution or country is immune.
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?