“(I)t would be a grave mistake to imagine that Boeing’s main task is to get the 737 MAX back in the sky fast. Instead it has to deal with the aura of incompetence and evasion surrounding the firm. To do that, Boeing’s board should strip Mr Muilenburg of his dual chairman/chief executive role and appoint an independent chairman, who sets three tests. First, Boeing must publish an independent investigation into what went wrong. Second, it has to rebuild relations with foreign regulators who now matter more than the discredited FAA. Last, it has to establish that flyers believe the 737 MAX is safe. If Boeing cannot pass those tests by the end of the year, its board should ask Mr Muilenburg to leave.”Economist
June 21, 2019
“The biggest danger is to Boeing’s brand…Reputation is vital.”
Reputation risk: In the C-suite, the peril of stakeholders’ disappointment and anger is often personal.
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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