REPUTATION AT RIsk - ACE Group

REPUTATION AT RISK4. Companies must get betterat measuring and managingexternal perceptions.This report shows that only a quarter of companies areconfident about how they evaluate the strength of stakeholderrelationships that form a crucial foundation for reputationalrisk management. Just over one in five companies thinkthey are very effective at measuring external perceptions ofthe company. Measurement can be complex and requirescommitment from across the business, but it need not beimpossible. Companies can start by engaging in more frequentdialogue with stakeholders to understand their views andmonitoring the external environment more systematicallyto identify the emerging reputational threats that put theirrelationships at risk.5. Companies mayunderestimate the challengesof crisis management.Companies feel confident about their ability to handle andrecover from a crisis. Almost four in ten respondents say thattheir company is very effective at crisis management, and32% believe they are very effective at restoring reputationfollowing a risk event. However, the time that companies haveto respond to a crisis has fallen from weeks and months tohours and minutes. Today, few companies get a second chanceand our results suggest companies may underestimate thechallenge of dealing with a crisis in “faster than real time”.6. From an insuranceperspective, two-thirds ofcompanies feel inadequatelycovered for reputational risk.Many executives interviewed for this report believe thatreputational risk is difficult to insure. At the same time, somesee considerable potential for insurers and brokers to providemore help. An increasing number now offer practical crisismanagement support as part of the insurance product. Morebroadly, they have a valuable role to play in helping companiesmanage the more “traditional” risks effectively in the firstplace, so the risk of reputational damage is reduced. Theinsurance market can also help them to apply a “reputationalrisk lens” to each of these risks, enabling them to see thingsmore clearly from the external perspective that is so crucial toa company’s reputation.05