![Mitigate value-destroying legal risk. For Fox, Kossovsky said. “This new reputation at FOX Corporation, if it [is] indeed forming, is or will be value-destroying.”](https://steelcityre.com/wp-content/uploads/2023/10/20231016b-Steel-City-Re.jpg)
Fox experienced a surge in reputational risk in the summer of 2021, according to reputational risk insurance provider Steel City Re’s resilience monitor. […] “Reputation risk is usually triggered by missed expectations,” Kossovsky said. “Arguably, stakeholders expected that Rupert Murdoch would once again pull the organization back from the brink after an ethically questionable strategy went sour. They’ve been disappointed.”
CEO’s Conviction SEC Charges. “Boards should demand… intelligence on stakeholder expectations,” said Kossovsky.
Tech companies changed policies. “(S)parking outsized emotional reactions, Kossovsky said,…are a hallmark of matters carrying serious reputational risks.”
![A new generation of risk managers trained specifically in the role and with a deep understanding of risk and risk transfer is reevaluating how they use insurance, increasingly preferring to manage and self-insure their own risks instead of relying on the open market. […] “We reinsure captives not to transfer the bulk of the risk, which is essentially equity risk from a capital perspective, but for the strategic purposes of affirming the quality of risk management.](https://steelcityre.com/wp-content/uploads/2023/09/20230911-Steel-City-Re.jpg)
A new generation of risk managers trained specifically in the role and with a deep understanding of risk and risk transfer is reevaluating how they use insurance, increasingly preferring to manage and self-insure their own risks instead of relying on the open market. […] “We reinsure captives not to transfer the bulk of the risk, which is essentially equity risk from a capital perspective, but for the strategic purposes of affirming the quality of risk management.
“Lightning does strike,” (Kossovsky) said, but firms that can demonstrate that they have developed effective governance systems and implemented thoughtful risk management experience a much different impact: “That’s where enterprise risk management creates value.”
Backlash Over AI Work. Companies can mitigate the risk of backlash by encouraging collaboration between IT, enterprise risk management and communications within the organization, as well as getting the board involved in overseeing the risk management process, said Steel City Re’s Kossovsky.
Not Want to Fly Southwest Airlines. Our measurements of reputational health indicate danger! #LetRiskManagersManageRisk
Record high profit risk. Experts warn that exuberant price increases may come with reputational risks. “Boards should communicate that the firm’s risk management process…is thoughtful, dutifully overseen, and applies to everything that is mission critical, Kossovsky wrote.
CEOs Going Viral. Starbucks founder Howard Schultz recently clashed with Sen. Bernie Sanders “There being nothing to surprise their respective stakeholders, raise their emotional states, and shift their prior expectations, I don’t think there was any material reputational impact to anyone,” Kossovsky wrote.
Reputation insurer Steel City Re is offering access to its proprietary Reputation Volatility Metrics (RVM) Reports as a stand-alone product to boards of directors seeking timely, actionable intelligence tools to help them oversee mission critical risks. Best governance practices encourage boards to improve their risk oversight with independent intelligence sources. At a time when companies face multiple shifting and diverse risks that are magnified and accelerated by weaponized social media, Steel City Re said that its RVM report is a powerful tool for board members overseeing the management of enterprise risks such as ESG, reputation, ethics, safety, and security.