Southwest Airlines reputation crisis. At crisis day 277, Southwest equity is under performing the S&P500 index by 36.5%.
Team and Culture
In a world of polycrisis, […] risk managers need to… market the elevated quality of their risk management processes. The author thanks for their contributions to this article:
Courtney Davis Curtis, University of Chicago; Deyna Feng, Cummins, Inc.; Mary C. Friedl, Redbox; Kathleen A. Graham, The HQ Companies; Chris Hammond, Stepan; Enya He, Blu Clarity PBC; Carnell R. Jones, Trinitas Ventures; Christy Kaufman, Zillow Group; John C. Kline, Discover Financial Services; Manuel Padilla, MacAndrews & Forbes Incorporated; Soubhagya Parija, FirstEnergy and New York Power Authority; Kristen Peed, CBIZ; Theresa Severson, Kite Realty Group; Seung Yoo, Regal Rexnord Corporation; and Denise Williamee, Steel City Re.
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.
ESG risk is one of a growing number of stakeholder-centric issues falling under the greater rubric of reputation risk. High-profile, costly risk management failures at AB InBev (Bud Light), Southwest Airlines and Silicon Valley Bank indicate that it is time for risk management to be more fully integrated into corporate processes, like marketing: #letriskmanagersmanagerisk! Reputation risk management needs to be a standard area of enterprise risk management responsibility. Can we drink to that?
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