April 16, 2019

“Though Goldman is contesting the (1MDB) case, it is spooking shareholders, who worry about both onerous fines and what it implies about oversight at the bank. Since November its share price has under-performed an index of other bank stocks by 10.3 percentage points, suggesting that the scandal may have wiped as much as $9.1bn off its value.”

April 16, 2019

“The first task for David Solomon, who took over as chief executive last October, is to clean up Goldman’s reputation.”

Reputation insurances can help both protect and restore reputation value through both their instrumental and expressive values.

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?