Newsworthy

October 23, 2024

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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.

October 11, 2024

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DOJ Hold Boards Accountable Risk Management. New enforcement plans outline expectations for data oversight, compliance expand the potential for reputation risk.

DOJ has updated its expectations expanding the potential for reputation risk. Under the new guidelines, prosecutors will consider whether companies have a process for identifying and managing emerging internal and external risks related to the use of new technologies, such as AI, and whether they are integrated into broader enterprise risk management practices.

September 14, 2024

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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.

September 12, 2024

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Reputation Risk Hinted by Nickname Nurse Death

Reputation risk arises from the failure to meet expectations. All too frequently, reputation risks arising from material operational problems known to insiders are dismissed by those in charge or authority. Nicknames can indicate an issue with ethics, innovation, safety, security, sustainability, and quality. “Junior doctors were referring to Lucy Letby as “Nurse Death” … two years before she was arrested. […] Letby, 34, was sentenced to 15 whole-life orders after she was convicted across two trials of murdering seven babies and attempting to murder seven others.” Board members should note that there are many windows into human resource-based organizational risk.

September 10, 2024

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At the end of reputation risks’ long tail are board-level consequences, exemplified by the denouement of this infamous winter 2022 crisis precipitated by software quality issues, unaddressed. “Southwest Airlines on Tuesday announced an overhaul of its board of directors, including the planned departure of its executive chairman, Gary Kelly, after a meeting with a hedge fund that has called for sweeping changes at the company.” The takeaway: reputation risk management is always a vital governance issue.

At the end of reputation risks’ long tail are board-level consequences, exemplified by the denouement of this infamous winter 2022 crisis precipitated by software quality issues, unaddressed. “Southwest Airlines on Tuesday announced an overhaul of its board of directors, including the planned departure of its executive chairman, Gary Kelly, after a meeting with a hedge fund that has called for sweeping changes at the company.” The takeaway: reputation risk management is always a vital governance issue.

September 9, 2024

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Affirming in practice what it disclosed in January, Blackrock "engaged 2,683 times on strategy, purpose and financial resilience-related themes with 2,014 companies — more than any of its other engagement priorities — this proxy year. Given this information, board directors may want to prioritize financial resilience in their own work and in engagement with index funds." Steel City Re can provide metrics and tools to support innovative strategies for strengthening financial resilience.

Affirming in practice what it disclosed in January, Blackrock “engaged 2,683 times on strategy, purpose and financial resilience-related themes with 2,014 companies — more than any of its other engagement priorities — this proxy year. Given this information, board directors may want to prioritize financial resilience in their own work and in engagement with index funds.” Steel City Re can provide metrics and tools to support innovative strategies for strengthening financial resilience.

August 8, 2024

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Quantas ex-CEO Forfeits Bonus for Reputation Damage

Qantas Airways Ltd. docked A$9.3 million ($6.1 million) from former Chief Executive Officer Alan Joyce’s final payout and announced a governance overhaul after a review partly blamed board and management errors for the carrier’s reputational crisis. This punitive action conforms to heightened expectations this year by both institutional investors and proxy advisers that companies should be clawing back CEO compensation for both reputational damage and for failures in risk management, even if financials do not have to be restated. This should help focus board attention to the factors that increase, protect, and restore reputation value including reputation risk intelligence, risk management, and reputation value insurance (aka, Side R).

August 7, 2024

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Board members and those in C-suite executive positions view the reputational risks posed by litigation as the most significant risks facing their businesses. This suggests that litigation risk counts as one of the principal, strategic considerations of large companies, rather than being a purely operational or legal concern.

FTI Consulting’s research found that Board members and those in C-suite executive positions view the reputational risks posed by litigation as the most significant risks facing their businesses. This suggests that litigation risk counts as one of the principal, strategic considerations of large companies, rather than being a purely operational or legal concern.

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