“The prevalence of these issues, and how quickly media sources amplify them, makes food and beverage companies particularly susceptible to reputational damage and the significant financial impact that damage can cause
“Even companies that market products similar to a recalled food can suffer,” said the Deputy FDA Commissioner in a recent Food Safety Magazine article. “The worst thing that can happen to a food sector or the food industry is the loss of consumer confidence due to recalls or disease outbreaks.” These are losses driven by fear.
November 20, 2018
Food & Drink
“The worst thing that can happen to… the food industry is the loss of consumer confidence due to recalls or disease outbreaks.”
Reputation risk: peril of stakeholders’ disappointment and anger.
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?