A while ago I e-mailed a company that had some negative publicity suggesting to them that they needed to be careful as their reputation risk profile is increasing.

Incredulously I received a mail back from the company stating that management was perfectly happy with the performance of its spokesperson.

This is a clear showing of how managers can misunderstand reputation risk and so-called spin. Protecting an organisation’s reputation start way before you have to field media questions and appear in a negative light in the media.

It is much more than just issuing statements to the media or starting an internal witch-hunt for the persons that leaked certain information to the media.

It is about acting proactively, investigating the allegations and realising that there are some dissatisfied stakeholders. What is clear from the articles in the media is that this company’s internal stakeholders are dissatisfied. That is why Reputation Risk is often defined as the state of negative public opinion when the reasonable expectations of stakeholders are not met. It can result in loss of sales, share value decreases and breakdown in relationships.

What this company does not realise is that Reputation damage is rarely an accident.  If you dig deep enough into an accident, you will find intent; you will find a policy that made the accident possible.  The earliest warning signs involve issues of integrity or quality.  Where a company is accommodating policies that disadvantage either customers, employees or shareholders – even if they’re not doing anything illegal that is the beginning of an environment where the values of the company are going to make a decision possible that ultimately could do a lot of damage.

Everybody’s reputation breaks. There is no’ such thing as an indestructible reputation.  Even the best company’s reputations have. You have to look at it as a suit of armour.  Sooner or later your reputation will be in jeopardy, and how thick will your armour be.

Unfortunately there seems to be in many companies a tendency to treat reputation risk management like a faucet. Something that you can switch on when the time comes. This stems from the inability to realise that damage control and fire- fighting after the event or crisis is a Reactionary Approach.

Internationally there has been a paradigm shift towards a Proactive approach which includes building up “reputational capital” before a problem or crisis arises.

It will do this company good to realise that to build reputational capital require an understanding of the drivers of corporate reputation and the risk and opportunities that each driver offers. That knowledge coupled with the understanding that no Company, organisation or individual whose livelihood depends on public support can afford to function without a reputation building and a crises communication plan will enable delegates to formulate strategies for building, sustaining and protecting corporate Reputation.

This thinking and understanding is far more than just having a “spinmeister” employed.