“Nearly 2,000 Zambian villagers have won the right to sue mining giant Vedanta over alleged pollution, the UK Supreme Court has ruled. The landmark judgement means other communities in developing countries could seek similar redress in the UK against large multinationals.”BBC
April 11, 2019
“Corporate Social Responsibility policies should not just be seen as a polish for their reputation but as important commitments that they must put into action.”
Corporate social responsibility is neither reputation insurance nor reputation risk management. Rather, it is a liability to be honored.
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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