From managing reputation to managing reputation risk
In increasingly turbulent and polarized times, winning and maintaining public trust is getting more difficult.
That holds true not just for politicians but for organizations too.
For many businesses and brands, managing their reputation has become something of a tightrope walk as accepted positions on issues such as diversity and sustainability become contentious areas.
At the same time, the cost of getting it wrong is beginning to hit home as regulation and litigation on these issues results in a greater risk of penalties, claims and financial damage.
Our third global Reputation Risk Readiness Survey reflects this uncertainty. The results reveal big shifts in the risk factors businesses are most concerned about, with cyber security emerging ahead of ESG as the biggest risk factor threatening reputations.
Responding to the changing risk landscape, businesses are agile in assessing risks on a case-by-case basis and willing to accept a higher level of risk if they are confident that an activity or association is right for them.
But the results also appear to confirm a trend we identified in 2023, of greater finance and corporate involvement in decisions around reputation management, reflecting a shift in focus among leading businesses from managing reputation as a function of branding to managing reputation as a risk (operational and financial).
Cyber-attack is no. 1 reputation risk
65% of respondents named cyber-attack among their top reputational risk factors, a major shift since our last survey in 2023 when cyber was named by just 24%. Geopolitical tensions and instability can heighten cyber risk, resulting in more frequent and sophisticated attacks.
ESG concerns continue to grow
64% said environment issues were a top reputation risk, up from 52% in 2023. Governance (56%) and social impacts (47%) also increased as reputation risk factors. Despite pushback against the ESG agenda, regulations continue to tighten in many jurisdictions leading to heightened reputational concerns.
Companies take reputation seriously
86% said they have a formal process in place for assessing and managing reputational risks, with 22% saying this is linked to board key performance indicators (KPIs), up from 14% in 2023.
Appetite is high for the right risks
57% said they had a high appetite for reputation risk if they feel an activity or association is the right fit for their business, while 69% assess reputation risk apetite on a case-by-case basis.
Crisis teams are stronger
87% say they have a formal team that trains together and responds to negative publicity events, with 34% saying this is linked to KPIs — up from just 19% in 2023.
Financial impact modeling is low
11% said they had a great deal of modeling capability to understand the costs and liabilities associated with reputational damage, while 64% had a moderate amount of modeling ability.
Managing reputation as an opportunity — and a risk
A strong reputation is a valuable asset for any company, but it's equally crucial to manage the risks that can damage it. System failures, financial, regulatory, and legal issues can all take a toll on your brand's image and bottom line. In today's polarized and noisy world, business leaders need to stay ahead of reputation risk signals from the media, customers, and stakeholders.
Discover how to build resilience with our Global Reputational Risk Readiness Report, which outlines essential strategies like sentiment tracking, risk intelligence, impact assessments, crisis preparedness, and board-level accountability.
Complete the short form at the top of this page to access the full survey report.
