REPUTATION AT RIsk - ACE Group

executivesummary1. Reputation is a company’sgreatest asset – and it isincreasingly at risk.Four out of five executives believe that reputation is theircompany’s most valuable asset. However, they believe theyare facing a rise in the risks associated with reputation – notleast as expectations around corporate behaviour change,fuelled in part by the recent financial crisis and heightenedpublic scrutiny of business. In addition, they say the speed atwhich reputational threats emerge is increasing. Two-thirdspoint to social media as a key factor behind this.2. Reputational risk isespecially difficult to manage.Nine out of ten respondents agree that reputational riskis more difficult to manage than any other risk category.It can emerge from anywhere within the company or itssupply chain, making it difficult to predict. It is seen asdifficult to quantify and is generally less well understoodthan more traditional and more tangible risks. At thesame time, more than two-thirds of companies believeinformation and advice about how to manage reputationalrisk is hard to find, compounding the sense of uncertaintyand confusion about how best to manage it.3. Globalisation andregulation are the biggestsources of reputational risk.Our survey respondents are particularly concerned abouttwo trends that are influencing reputational risk levels.The first is their expanding global footprint and supplychain, which accounts for three of the top five concerns.The second relates to the increasingly dynamic andchallenging regulatory environment, which accounts for theother two top five worries. With compliance now seen asa core competence in many industries, failure to manageregulatory change effectively will inevitably lead to seriousreputational damage.04