The Role Of A Reputation Risk Manager

What are our Reputation Risks? The Role of A Risk Manager In  Reputation Risk.

 

Reputation Risk is largely sitting very uncomfortably in organisations; passed by the board or governance team to somewhere between marketing, communications and risk. Our experience is that neither, solely, is properly equipped to manage reputation risk.

 

Reputation is not strictly the role of a risk manager because it demands an understanding of the practice of communications.  Nor is it strictly the role of communications, as it demands a real understanding of reputation and its dynamics and how to effectively minimise risk and maximise reputation capital.

So, sitting in between the two, managing reputation risk effectively demands a hybrid approach. Either way the compelling need is that responsibility sits firmly at board level.

Operational risk managers should be wary of approaching reputation risk. While they may perceive that all reputation risk incidents are rooted in an operational causes,  this is not necessarily the case. Reputations are any perceptions and beliefs held by stakeholders , not necessarily around any operational measures. They may be issues that are rising in visibility or strengthening in negative emotion. They can also arise from a lack of voice in an issue or from a conversation that is driving the sector or agenda at any point of time.  Reputation risk can also simply arise just from rumours.

 

Reputation Risk: The Basics

·      Risks to reputation will happen, they are increasingly frequent in a digital era.

·      Reputation risk cannot solely be addressed by operational address

·      Reputation risk can be minimised by sound operational processes and systems.

·      Reputation risk can be used to create reputational capital when actively and properly managed.

·      Reputation risk can be untruths.

·      Reputation risk must have a reporting presence across the organisation.

·      Reputation risk involves every level and every function of an organisation

·      Sound response to reputation risks can protect and enhance reputation, done badly and it can diminish value and licence to operate.

 

Reputation Risk Manager: The Aim

·      To gain real insight to monitor the real and changing Reputation Risks faced by the organisation.

·      To be able to map current and potential reputation risks on a reputation risk register.

·      To prepare organisational processes and systems to prevent and protect against reputation risk

·      To set up an ongoing reputation risk reporting framework that dovetails with the current management MI.

·      To establish a reputation risk organisational structure including a rapid response team headed by CEO or board level.

·      To access real time reputation risk information to be able to respond proportionately and appropriately to reputation risk

·      To appreciate and enable the role of cross functional departments in protecting, preventing and reacting to reputation risk.