Cost of Reputation Loss

February 7, 2025

Reputation risk: financial damage from emotional stakeholders who are angered, or worst, feel betrayed. “We laid out the strategic and budget plan for 2025 expecting that American products, including American whiskey, will be less accepted by those countries outside of the US because of first, tariffs and, second, emotion,” said Takeshi Niinami, chief executive of drinks giant Suntory Holdings.

Reputation risk: financial damage from emotional stakeholders who are angered, or worst, feel betrayed. “We laid out the strategic and budget plan for 2025 expecting that American products, including American whiskey, will be less accepted by those countries outside of the US because of first, tariffs and, second, emotion,” said Takeshi Niinami, chief executive of drinks giant Suntory Holdings.

December 4, 2024

Governance experts including the National Association of Corporate Directors and other authorities are encouraging boards to support management more closely in an "uncertain — and possibly volatile — environment," even at the risk of appearing to micromanage. But with engagement comes culpability for the reactions of already-angry stakeholders. Simply put, the costs of leaning into a reputation crisis may include the dispensation of board members whose personal losses will not be covered by D&O liability insurance. Board members need personal reputation insurance.

Governance experts including the National Association of Corporate Directors and other authorities are encouraging boards to support management more closely in an “uncertain — and possibly volatile — environment,” even at the risk of appearing to micromanage. But with engagement comes culpability for the reactions of already-angry stakeholders. Simply put, the costs of leaning into a reputation crisis may include the dispensation of board members whose personal losses will not be covered by D&O liability insurance. Board members need personal reputation insurance.

October 28, 2024

An industry that is using parametric technology to insure losses from natural disasters caused by wrathful deities can now also provide meaningful insurance for losses from reputation disasters caused by emotional mortals. The 4-M parametric framework of metric, model, monitor and market for natural earthquakes disclosed at the 2023 Hawaii Captives Insurance Conference makes parametric insurance for metaphorical earthquakes easy to back, underwrite, broker and bind.

An industry that is using parametric technology to insure losses from natural disasters caused by wrathful deities can now also provide meaningful insurance for losses from reputation disasters caused by emotional mortals. The 4-M parametric framework of metric, model, monitor and market for natural earthquakes disclosed at the 2023 Hawaii Captives Insurance Conference makes parametric insurance for metaphorical earthquakes easy to back, underwrite, broker and bind.

October 23, 2024

We often talk about how the essence of reputation risk is the risk of economic damage from a list of emotional disappointed stakeholders, usually wrapping up with social license holders. Here is a story of one such aggrieved group from Rockdale County, GA, which is trying to oust BioLab from its site after a devastating industrial fire. […] “We can no longer stand by and allow a corporation to continuously affect our current and future physical health, our mental health and our overall quality of life,” Rockdale County Commissioner Sherri Washington said.

We often talk about how the essence of reputation risk is the risk of economic damage from a list of emotional disappointed stakeholders, usually wrapping up with social license holders. Here is a story of one such aggrieved group from Rockdale County, GA, which is trying to oust BioLab from its site after a devastating industrial fire. […] “We can no longer stand by and allow a corporation to continuously affect our current and future physical health, our mental health and our overall quality of life,” Rockdale County Commissioner Sherri Washington said.

September 27, 2024

A record-high percentage of board directors want two or more of their colleagues replaced, according to a new survey from PwC, citing reluctance to challenge management, overstepping the boundaries of their role, long tenure and other issues. Almost half of those surveyed want at least one colleague replaced.

A record-high percentage of board directors want two or more of their colleagues replaced, according to a new survey from PwC, citing reluctance to challenge management, overstepping the boundaries of their role, long tenure and other issues. Almost half of those surveyed want at least one colleague replaced.

September 14, 2024

Boeing employees are striking for…more input into product safety. This labor action is a manifestation of lost reputation value. This labor action is a stark reminder that angry, disappointed employees are one of many expressions of a reputation crisis. Corporate leadership and governors must be mindful that that the long tail of reputation risk typically includes costly investor, regulator, and yes, employee actions.

Boeing employees are striking for…more input into product safety. This labor action is a manifestation of lost reputation value. This labor action is a stark reminder that angry, disappointed employees are one of many expressions of a reputation crisis. Corporate leadership and governors must be mindful that that the long tail of reputation risk typically includes costly investor, regulator, and yes, employee actions.