Offline Reputation Risk
A global survey was recently published by Deloitte about reputation risk. This survey is published every year, and this year, it became even more important protect one’s reputation due to increased risk of damage to it. A large percentage of businesses named reputation risk as their highest risk. What pushed this risk to the top of the list was different for various companies, but they listed ethical problems, security issues, financial woes and service issues as factors that accounted for it.
Why Is the Risk to Your Reputation So Vital?
Reputation has garnered such attention due to the way it is so quickly altered these days. In the past, the reputation a particular company might have would typically be a reflection of what mainstream media published. It was much easier to keep under control back then. Now, reputation is influenced by so many different factors, particularly a variety of separate Internet processes. It could be affected by reviews people leave online, the way the search engines work, what information is posted on Wikipedia pages, social media posts and more.
Those people who are most vital to a company- customers and stockholders, often look online to learn about companies they want to buy from or invest in. They may not be able to ensure that the information is accurate, but they are still often swayed by misinformation being spread all over the internet. The World Economic Forum estimates that about 25% of any given company’s market value is determined by its reputation.
Most Prominent Risk Factors
The report from Deloitte shows why CEOs and other top executives care so much about reputation risk. Of those who responded to the survey and said they had reputation problems in the past, about 40% said that they lost money and hurt their brand’s value. Various industries felt the impact in different ways.
Those offering industrial products suffered the greatest losses in earnings. Healthcare and life sciences felt damage to their brand’s value. Energy and resources suffered financial loss as well. Financial services had to undergo investigation.
Just imagine how your company could be impacted.
Keeping Your Company Safe
Many of those who responded to the survey said that they were planning to protect their reputation better in the future. The majority said they would dedicate more resources toward reputation management. They wanted to put more funds into assessing risk and handling crises as they happened. It’s important to prepare, since attacks on one’s reputation can come at any moment and may not come with any warning beforehand. It takes only hours for many scandals to start spreading like wildfire across social media pages and new outlets. The companies that manage to weather these storms are the ones that are prepared.
What can we take away from this? We should understand that reputation risk doesn’t discriminate. Everyone is at risk, and as the leading reputation management company, we support the change in focus to make reputation management more important. We have been working steadily to invest in reputation management advances and ensure that our clients are more protected than ever. We believe that reputation management cannot be made too important, since its value will only grow in the coming years.