“Attention healthcare executives: When your stakeholders are doctors, nurses, and hospital workers who are perceived as heroes in a public health crisis, and their expectations of their employer are shattered, the reputations of those medical institutions are going to incur significant material damage. […] Politicians are going to hold hearings, legislation is going to be proposed, funding formulas could be rewritten, regulators will likely apply new levels of scrutiny, attracting talent may become more difficult, and issuing debt for expansion may become more expensive.”Governance Institute
May 10, 2020
“Losers will be those whose reputations have been sullied as a result of conflict with these key stakeholder groups.”
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Institutional Reputation: Thinking beyond rankings to capital, community, and continuity..
For additional healthcare-focused resources on COVID-19, visit the Governance Institute COVID-19 Resources page. For a broader view of reputation risk in healthcare, click here. You can also discover additional articles by Steel City Re here, mentions of Steel City Re here, and comments on newsworthy topics by Steel City Re here.
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Steel City Re mitigates the hazards of ESG (reputation) risk that threaten reputation value. We use parametric reputation insurances, ESG insurances, and risk management advisory services to make our clients reputationally resilient.
Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive Steel City Re reputation risk governance and management solution.
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Context and Background
Risk managers are now central to the process for managing risks to reputation and that’s a process marketers and communications professionals need to be a part of. The oversight of reputation risk management is mission-critical.
Courts have increasingly been ruling that reputation is a mission critical function and oversight of its management is a responsibility of the board of directors. Courts are also ruling that marketing statements companies make – if they related to issues that affect their reputation, like ESG – may be considered material by investors. Litigation along these lines has yielded large settlements or verdicts for plaintiffs.
And now, the SEC has proposed new rules requiring disclosures by public companies related to their ESG activities; those statements could become a communications and reputational minefield.
As a result, reputation risk management is evolving into an intelligence gathering operation spanning the entire enterprise, roping in the enterprise risk manager, compliance counsel, and increasingly, reporting up to the Chief Legal Officer. There is a growing recognition that reputation is not a product merely of marketing and media coverage, but of the degree to which stakeholders’ expectations are aligned with actual performance. The reputation risk management process requires a thorough and ongoing analysis of stakeholder expectations, the risks of disappointment, and a plan for either managing those expectations or assessing and insuring against the cost of failure.
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