Ideas, Beliefs and Practices

\)

Culture Fosters Stakeholder Trust

Steel City Re’s culture—the ideas, beliefs, and practices of our organization—nurtures trust in our products and services. Our ideas and beliefs are an open book. Our intellectual journey is memorialized transparently in the professional literature.

We honor the first principle of corporate law: corporations may only conduct lawful business by lawful means. We believe that quality risk governance and risk management (controls) encourage conformance with this principle. Such controls comprise processes that are auditable, reliable, and repeatable. Both our own internal practices, and those we help establish for our clients, are engineered to evince quality.

“A man I do not trust could not get money from me on all the bonds in Christendom. I think that is the fundamental basis of business.”

John Pierpont Morgan

Culture fosters stakeholder trust. Our approach to trustworthy risk governance and management is a blend of quality management concepts (Define, Measure, Analyze, Improve, Control) backed by behavioral economic principles (Nudge and Signaling Theory); and authenticated with financial instruments (Insurance, Equity Portfolios). Features differentiating our solutions in the market include how we define and measure reputation value and risk; how we nudge conformance; how we engineer our parametric insurance solutions and arbitrage strategies, and how we authenticate our synthetic measures of reputation value.

Our deployment of quality risk governance and management solutions begins with the following definitions:

  • Reputation Value: the forward moving economic benefit of stakeholders’ expectations. We keep our thumb on the pulse of what our stakeholders expect and we deliver on those expectations.
  • Reputation Risk: the threat of economic loss of reputation value from angry disappointed stakeholders. We avoid risk by delivering on our promises and not using aspirational language or marketing pablum to win over our stakeholders.
  • Reputation Crisis: the ugly moment of truth when stakeholders realize their expectations are not being met and initiate economically painful actions. Losses have a long tail.
  • Reputation Risk Management: a strategy informed by behavioral economics to help mitigate a reputational crisis. Reputation Risk Management involves the entire risk management apparatus: dutiful governance, resolute leadership, effective controls and meaningful strategic insurances.
  • Reputation Insurance: a parametric indemnification which will reduce anticipated economic losses from the long-tail consequences of a reputational crisis.

We believe that societymarkets, stakeholders, activists, et al.rewards companies with trustworthy risk governance and risk management. When told a simple, authenticated, and convincing story, society will appreciate, value and reward those companies. In other words, the whole point of creating value from these strategic trustworthy capabilities is lost if they are kept secret.

Related Articles

Boeing Company reputation crisis day 41. With the erosion of Boeing’s reputation as backdrop, the aerospace and defense giant's equity is sinking as shareholders contemplate the long costly tail of reputation damage the firm faces. Its ROI since the January 5 safety incident when a door plug detached mid flight is under performing the FTSER US aerospace and defense Index (FTWIUSA502010Y) by 20.2%. This is comparable to the 18.2% equity under performance of Southwest Airlines relative to the US airlines index (DJUSAR) on the 41st day of its reputation crisis following its IT systems meltdown.
Boeing Company reputation crisis day 41. With the erosion of Boeing’s reputation as backdrop, the…
Read More
Boeing’s hidden costs of its reputation crisis. Shifting expectations among four stakeholder groups have shifted…
Read More
Pharma has a misinformation problem — and execs could be on the hook. While vaccine-related…
Read More
Nir Kossovsky, CEO of Steel City Re, an insurance provider for reputational risk, said his firm’s Reputation Resilience Monitor for Tesla indicated little concern about Musk’s pay package, but real concern about the firm’s cost of operations, declining net income and future prospects. […] “However, should stakeholders become excitable, then any incident — even another round on the pay package — could trigger a shift in their expectations from fandom-level support to anger and disappointment,” he said.
Nir Kossovsky, CEO of Steel City Re, an insurance provider for reputational risk, said his…
Read More
Forty years after a tsunami of lawsuits demanded action for the risks of D&O liability, history is rhyming with the risks of D&O culpability. Here are the top 3.
Forty years after a tsunami of lawsuits demanded action for the risks of D&O liability,…
Read More
$5 trillion worth of shareholder votes want more ERM this year. The investment stewardship team…
Read More