“A growing call to boycott luxury hotels owned by the kingdom of Brunei has led the hotels to hide their social media accounts. The public outcry comes in response to the implementation of new Islamic laws that make gay sex and adultery punishable by stoning to death.”CNN
April 5, 2019
“We understand people’s anger and frustration …and (are saddened by) the impact it is having on our employees, guests, partners and suppliers.”
Reputation crises are characterized by disappointment, diminished trust, causing economic and political losses visible on every line of the P&L.
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?