Survey shows reputational issues have a strong impact on customer confidence, brand value, and a company’s bottom line
Although the majority of global companies are confident that their reputations are strong, that confidence declines when it comes to protecting against and responding to reputation risks. These were the findings of the recent Reputation@Risk survey conducted by Forbes Insights on behalf of Deloitte Touche Tohmatsu Limited (DTTL).
The global survey of more than 300 executives found that 39 percent of companies rated the maturity of their reputation risk management programs as either average or below average. Yet such programs can be critical to an organisation’s bottom line and ability to rebound from a hit to their reputation.
“A key success factor for companies today is mitigating reputational risk. Negative reputational events can cause financial and brand ramification, which we help clients to mitigate through the utilisation of technologies and analytics which help clients to maintain and strengthen brand value.”
The top underlying drivers of reputation risk were found to be related to ethics and integrity (55 percent), such as fraud, bribery and corruption; followed by security risks (45 percent), both physical and cyber; and product and service risks (43 percent). These three drivers are expected to remain the leading factors for at least the next three years. Third-party relationships are another rapidly emerging risk area, as companies are increasingly being held accountable for the actions of their suppliers and vendors.
As scrutiny over third-party relationships rises, opportunities for potential risk grow in tandem. In addition to revenue and brand value loss, which were both shown as leading impacts, the surveyed executives indicated regulatory investigations were another major consequence.