Managing Risk Reputation
February 23, 2010
Reputation has a close connection with the trust. Without a reputation, the trust does not exist. Reputation is a very important component for a business, therefore, the risk of reputation must be managed properly.
According to the findings from the Economist Intelligence Unit, reputation is one of the most important corporate assets, but it is most difficult to protect. Reputation can be a competitive advantage, but the potential for damage, especially due to the development of media and communications, the increasingly stringent regulations, as well as decreased customer loyalty.
Weakened reputation of business or organization doing the miss of expectations, such as poor Q3 results, having failed to pay (default), or exposed to a particular scandal.
About two years, the world was rocked by the global financial crisis. This resulted in risk reputation to be higher. Some uncertainty about the business, bad financial conditions of companies, less conducive of market conditions, the number of fraud and other cases resulted in some companies more exposed to the risk of reputation.
Here are some steps you can take associated with the risks reputation:
1. Assessment
Conduct assessment of your business reputation out there. Identification of any perception that you can control. Next, create a policy to deal with risk reputation , and make risk reputation as a consideration in discussions with management and directors.
2. Assess Decision
Consider the public perception for every decision taken. Public perception is very important, especially if your company is high profile and known by the public.
3. Communication
Communication to all stakeholders have an important role, especially to maintain their trust in the company. If the reputation is damaged, then public confidence in the company can fade. Give financial condition in a transparent and accurate.
Communication here must include three elements, including:
• Concern: acknowledge that there are mistakes that happen, and express sympathy and disappointment
• Commitment: express commitment to resolve the problem, and expressing the steps to be taken in detail
• Control: the leader shows that they managed and control the situation well
4. Good Corporate Governance
So far, most of the cases that resulted in the collapse of the company’s reputation is the result of good corporate governance is not good. An example is the case of Enron, WorldCom, Satyam. To avoid cases like this that cause reputation dropped, then the Good Corporate Governance should be implemented. Obey the rules and procedures, run the monitoring and periodic audits, fraud detection and the possibility of another.
The role of a leader is vital in doing this reputation of risk management. A leader must determine the identity and ethics adopted by the company and the people in it. Meanwhile, the role of compliance is also important to make the rules, while maintaining that all rules, regulations and policies followed by both, monitored and reviewed periodically.
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Written by admin· Filed Under information , Tags:, managing, reputation, risk, trust
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