September 30, 2023
Southwest Airlines reputation crisis. At crisis day 277, Southwest equity is under performing the S&P500 index by 36.5%.
CMOs
September 26, 2023
![In a world of polycrisis, […] risk managers need to… market the elevated quality of their risk management processes.](https://steelcityre.com/wp-content/uploads/2023/09/20230926-Steel-City-Re.jpg)
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.
Tech Companies Changed Policies – Corporate Counsel
Tech companies changed policies. “(S)parking outsized emotional reactions, Kossovsky said,…are a hallmark of matters carrying serious reputational risks.”
September 11, 2023
![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.
August 17, 2023
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.
July 18, 2023
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?
July 11, 2023
Southwest Airlines (LUV) equity returns at 193 days normalized to the S&P500 returns are -10.3% (predicted based on historic reputation risk for LUV: -7.0%). It is under performing the Dow Jones US Airlines Index (DJUSAR) by 28.7%. The implied loss to shareholders is $2bn.
April 10, 2023
Panic and stock share dump. Thriving in a tornado corridor or flood plain demands fortitude and a reliable risk strategy. The same goes for investing in equity markets. In times of panic — think Southwest Airlines, Norfolk Southern and Silicon Valley Bank — investor moxie may give way to stock share dumps. […] Integrated processes, timely intelligence and good risk communications will help investors appreciate and value risk strategies and not panic.
March 3, 2023
ESG rhetoric pledge regrets. With ESG becoming as important to some companies as EBITDA and marketing departments ramping up the ESG rhetoric, the effective scope of dutiful oversight has expanded…The Delaware court increasingly sees oversight of all things mission-critical as a board duty.
January 24, 2023
Risk Strategy Authentication and Communication.If you oversee an effective reputation risk strategy process, but no one knows it, is it actually effective? This is a vital question boards of directors, senior executives, and risk professionals need to ask themselves in this era of enhanced regulatory enforcement. Building resilience requires a demonstrably effective, insurance-authenticated system.