68% of clients surveyed have no framework in place for reputational risk
A New survey on Reputation risk by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company, has revealed that 86 percent of clients are concerned about loss of income and a reduced customer base due to reputational risk.
The velocity of message flow in an interconnected 24/7 world has also made organizations concerned about protecting their hard-won reputations.
Key findings from the survey of 200 global organisations include:
- Seven in ten (72%) report that risk management teams have at least some responsibility for the monitoring, measuring or management of reputational risk.
- Nearly the same proportion said that reputational risk is reported at the C-Suite (61%) or Board level (66%) within their organisation. Almost eight in ten (80%)believe that the focus on reputational risk in their business will only increase in the coming five years.The majority of respondents highlighted that reputational risks could result in potentially crippling business outcomes for their organisation such as loss of income (86%) and weakened human capital, because of their reduced ability to retain (62%) or attract (57%) talented employees.
- Framed against this increasing focus, most respondents pointed out that when it comes to measuring and monitoring reputational risk, they face real challenges in accessing reliable data (51%), with a large proportion (42%) indicating they have inadequate tools to do so*
Garret Gaughan, Head of Global Markets P&C Hub, Willis Towers Watson, said “Reputational risk is increasingly of concern to our clients with most Risk Mangers now having some responsibility for risk mitigation in this area.
As a previously difficult to insure risk it is unsurprising that all of the survey participants agreed it would be helpful to them to have access to a reputation platform. WTW in partnership with Polecat, a leader in technology and reputation intelligence, has designed a platform that will allow organizations to monitor reputational threats in real-time and provide them with reputational impact scores against their peers for issues and risks. To complement this platform, Willis Towers Watson will soon be launching a risk transfer solution for this previously uninsurable risk. We believe that this combined approach will deliver reputational risk solutions to address our clients’ needs.”Download a full copy of the report here – www.willistowerswatson.com/en-GB/Insights/2021/01/global-reputational-risk-management-survey
Footnote – I addressed aspects of managing the velocity flow in my blog post An External Communication Policy – A Tool for Reducing Reputation Risk
- Also, where reputation cannot be easily measured I recommend a stakeholder-focused and “issue-based‘‘ approach to issues and incidents will aid in protecting the reputation.
- By examining and extrapolating and viewing issues and incidents through the lenses of a stakeholder, opportunities, shortcomings, and mitigation approaches will be revealed. Even though this is closely aligned to the ethical training provided by the Compliance department, this type of thinking and approach goes much further.
- There is thus a need to educate management to factor stakeholder management and reputation management thinking into decisionmaking
processes. Read my posts on Reputation-based Decision-making.