“This is a tremendous opportunity for anyone whose job involves (media monitoring and) communication with all stakeholder audiences: customers, employees, vendors creditors, investors, regulators, social license holders and activists. … (C)ompanies that have robust reputation risk management processes in place–and then communicate publicly about them–earn a “reputation premium,” outperforming their peers in the performance of their stock price.”
CMO Council
June 4, 2022
“Media monitoring is table stakes. Risk managers are now central to managing risks to reputation and telling a good reputation risk management story.”
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Firms must adjust their risk governance and management models from perils to process. Media monitoring may be standard practice, but risk management story telling is infinitely more proactive.
Quality communications enable firms to earn a reputation premium.
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, marketing with their media monitoring, 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.
One Last Question
Are ESG insurance or reputation insurance part of your strategy?