“(Robust insurance-based reputation solutions) demonstrate that the board had engaged objective outsiders to conduct analysis, and that those objective third parties had not only attested to the company’s governance but backed their opinions with insurance products…These types of warranties also deter and protect against attacks on individual board members by activist investors, politicians, and regulators, who will recognize the difficulty in mounting attacks against individuals whose decisions and actions have already been vetted and deemed dutiful by third-party insurers.”
NACD Directorship
May 17, 2019
“Strategically deployed third-party warranties and validation of a board’s actions will go a long way toward establishing their credibility.”
Reputation insurance: indemnification affirming trust and reducing economic losses.
For a broader view of reputation risk, discover additional articles by Steel City Re here, mentions of Steel City Re here, and comments on newsworthy topics by Steel City Re here. To read an abstracted summary of reputation risk, see below
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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