If we consider reputational risk as an unacceptable difference between how an organisation wants and needs to be perceived and how it is really perceived, we can easily understand how corporate reputation becomes a risk it is essential to manage. Its complexity and the speed with which it may change can affect both brand value and business continuity. This ecosystem can have a direct effect on financial and social capital and, inevitably, an immediate effect on the management of clients, suppliers and different stakeholders in the company.
Reputational risk is usually associated with external and internal factors, so it is important to minimise or, if possible, eliminate activities and issues that could generate negative publicity about business practices and relationships, or lead to loss of confidence in the company.
Participation in digital platforms, e-commerce and business management with computer systems and applications have increased the possibility of reputational risk having uncontrollable impacts that are difficult to manage with reactive measures.
Why should companies protect their reputation?
A company’s values, institutional character, brand, communication, responsibility and corporate reputation are as important to the customer as its services or the final product. The company’s goal is to create, maintain and work on trust, credibility and reputation.
- A failure in product quality control can impact the perception of the brand and image of the whole institution, reduce market share for certain products, or force the company to change its business relationships with suppliers.
- Negligent management of business practices or disregard for the market due to lack of compliance with ESG policies can directly damage business continuity in certain markets.
Where do we start?
Reputational risk must be assessed as part of the strategic processes of risk management: identifying, measuring and quantifying it can help us to study options for training and prevention, as well as ways of mitigating it.
RibéSalat offers you an effective methodology for recognising, identifying, measuring and mitigating reputational risk. After carrying out a study to define the strategic framework and control mechanisms associated with it, we will be able to help the company define strategies that are proactive rather than reactive in order to mitigate all insurable risks by activating tailor-made insurance policies.