How valuable is your reputation?
Cath Edwards 3 Green Rs, Peter Lycett AMB Insurance Services
A good company reputation is something you have worked long and hard to grow and maintain. In these days of social media it can be lost overnight and be nigh on impossible to get back.
One only has to look at how Starbucks’ and Amazon’s sales have been affected by their tax avoidance, all legal, but deemed by the public as unethical.
Alternatively, compare the growth of Waitrose in times of austerity, down to ethical practise and commitment to quality.
More than your reputation at stake
So do you want to position yourself as Waitrose or Primark? Of course Primark has its place in the world but if you are not watching your supply chain and treating your staff fairly, your reputation hangs finely in the balance. Loss of revenue not only comes from reduced sales but also fines, you may find the quality of job applicants drops. Money, time and resources need to be diverted on damage limitation, is this something you want to risk?
Use your website and social media to define your image, but be sincere about good intentions. Identify areas of potential risk e.g. if you are importing goods from overseas how confident are you that your supplier is not employing children, working their staff round the clock, paying them a poor wage or operating in an unsafe building?
Best Practices for Managing Reputation Risk
- A diverse and detailed reputation risk management plan provides your company with strategies on how to best monitor your business channels and help shape public opinion in your favour. Follow this guidance to effectively manage your organisation’s reputation risk:
- Develop an effective early warning system designed to monitor news about your company on websites, blogs and social media. Include a scheme for how to handle crises as they arise and any issues uncovered by the system.
- Foster a professional relationship with the media in order to better monitor how your company is perceived.
- To remain compliant and be prepared, stay informed on what trends are occurring in the business, economic, social and regulatory sectors, which have the potential to create new risks.
- Foster and manage professional relationships with regulators, which can provide your company with a more in-depth insight into current and upcoming regulations.
- Choose individuals to represent your company who connect well with both the shareholders and the public as well as embody your corporate goals and ideologies.
- Identify potentially adversarial special interests groups and work to foster professional relationships with them.
While this is not an exhaustive list of practices that could benefit your company’s risk management plan, it does provide a point of reference when you are shaping your own plan.
