“The commission found banks and other financial companies had ripped off consumers by charging for services they had not delivered, lied to regulators and given their customers poor advice. Although it only looked at what was happening in Australia, the report reverberated around the world.”Financial Times
March 26, 2019
“Culture is an important part of how firms work. It affects reputation, capital, morale, employees and customers.”
Reputation value: economic benefits of stakeholders’ expectations.
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.
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