May 2017

Reputation Risk Management - From A Reputation Perspective

We have just been working with a financial services organisation which is setting -  what we believe to be -  the global standard for Reputation Risk Management.

Already award winning in their global region for their work in risk, setting standards is not new to them and now they are seeking to take their standard for Reputation Risk to the regulator and are fully expecting it to become adopted.

We would like to share with you what organisations like this do differently.

Online Reputation RIsk Management.

An organisation strong in reputation risk management does not soley concentrate on online reputation. While this is often the channel where reputations to 'play out' quickly, stronger indicators come from having a sound understanding of your overall reputational health over a longer period of time. .

 

Reputation Risk Is Not Another Aspect Of Risk.

While risk managers are well versed in all the areas of risk, from strategic to financial, they are not perhaps so well versed in reputation.   And in order for reputation risk management and reputation risk mitigation to be effective, a sound understanding of reputation is an absolute necessity.

Adopting a fundamental framework for reputation is the starting point.

 

Adopt A Sound Reputation Risk Framework

 “All reputation risks stem from operational risk”

To us, this common phrase is an indicator that reputation is not really understood. Reputation risks can stem from operations of course and indeed from any other area of risk. However, reputation risks can also come simply from a rumour, a speculation, a change in emotion or an untruth. 

 

Reputation Risk Measurement And Monitoring – listen acutely to know how and when to respond

So to truly mitigate against reputation risk, it is then important to set measurement criteria.  Part of this must be the acute listening of the digital, online conversation and offline attitudes across all stakeholder groups.  Knowing how to listen well enables you to react proportionately and respond appropriately, this is a key reputation risk skill.

 

Reputation Risk Mitigation - Link Committees With Communications

Linking the various areas of risk with the communications teams is critical. Establishing a Reputation Risk Reactive Committee (RRRC) is a must , as is having senior representation and the authority to make decisions.

 

Reputation Risk Management – Build Capability and Culture

Ongoing management of Reputation Risk will see risk embedded across the organisation, from structure to reporting procedures and KPIs. It must involve all levels of the organisation and be built not just as a capability but as a culture.

 

If you are beginning to embark on a Reputation Risk strategy or are looking to develop and embed Reputation Risk practices then call Rachel on 07793 200888 or Steve on 07734 805499