Effective reputational risk management is pivotal, especially when you take into account that a businesses reputation is possibly it’s greatest asset. It’s the perception of a business in the eyes of its stakeholders – what can be more important than that?
These tips will give you a good idea on what you need to do to go about managing reputational risk and ensuring the safe passage of your business.
1: Practice What You Preach
The actions of a company or its employees define its reputation. That is why every conduct should be beyond reproach. Such behavior should be defined and enshrined in a business model whose core values shape the company’s reputation. The senior management must be on board in determining these core values and ensuring the business model is operational. That means all who are in leadership positions should lead by example; they should practice what they preach.
2: Involve And Align The Crisis Managers Around Reputational Risk
Security, business risk, and continuity managers, as well as lawyers, play a crucial role in crisis management. However, their unique expertise in their respective capacities can, at times, keep them from appreciating the real danger of reputational risk, which poses significant harm to the company. Many of these professionals will give prominence to issues such as terrorism, kidnapping, and insurgencies, allocating enough planning and training for such events.
But there is a need to not only focus on security incidents but also direct enough attention towards the need for reputational risk management. That is why your management team should be aligned around the need for prioritizing reputational risk when developing operational strategies for the business.
3: Integrate Risk Into Business Planning And Strategy Setting
From the above point, it is evident that there is a need to integrate risk into strategic planning and implementation. The managers must make sure that risk is a priority and not an afterthought when planning and strategizing for the business. It should be integrated into core management processes and be one of the vital components considers when at the decision-making table. With that, the management can facilitate a strategic view and analysis of risk and intersect risk management with that of performance.
To make the planning and strategy more robust, the management team must be aware of the critical expectations that are fundamental to the strategy. They should ask relevant questions that challenge these expectations constructively. Moreover, they should consider reasonable scenarios that can potentially invalidate one or more expectations. Therefore, the management should identify the innate weaknesses, loss drivers, discrepancies, and opportunities that can stifle the implementation of the business plan, thereby impacting performance negatively. The process should also include financial forecasting and budgeting processes needed to support the business plan to ensure they aid in managing liquidity risk.
4: Take A More Proactive Approach
With outreach and research techniques implements and lessons learned, it is necessary to put the discoveries into action. You and your management team should focus on the following three crucial areas:
• The anticipation of risks to strategy setting and enhancement opportunities
• Analyzing trends that potentially lead to opportunities or threats
• Planning on implementable actions on reputational levers as well as corporate conduct that will promote effective strategic execution
You also must utilize three reporting elements that contribute towards proactive management of reputation risk; the three are:
• Setting up an emerging threat alert service that is run via a robust software and vetted by an experienced team in the operational management.
• Online reporting of threats to reputation and strategic enhancement opportunities for senior management
• Quarterly reports and presentations sent to the top management overseeing major trends that can bring out constructive changes to the corporate behavior and positively impact strategic outcomes.
5: Establish Effective Control Of Processes
By institutionalizing the standardization of policies, the right technology, and procedures, it is possible to lower the probability and severity of events that can potentially damage the company’s reputation. While at it, do not lose sight of the need and importance of supplying quality solutions (products or services) consistently, it is less likely that such a strategy poses any significant threat.
If something unexpected pops up, you will be in a better position to lessen the severity of the reputational damage. You can achieve this by explaining or elaborating on the measures put in place to prevent such an incident and how you plan to keep it from ever happening again. It would help if you had a team of carefully selected third parties working, engaging, and treating the employees fairly to at you minimize the likelihood of scandals outside the workplace.
6: Keep All Data Secured
Data breaches can lead to the loss of unauthorized access to sensitive company data and confidential client information; this can dent your business’ reputation. Take the example of Cifas, which was the largest multisectoral fraud sharing organization in the UK in 2018 that has the highest number of identity theft and fraud in history.
In short, you should ensure that you have a robust cybersecurity system that is always up to date. Also, you must have a protocol that addresses such attacks and educate the company staff on the need to maintain data safety and how to prevent breaches.
7: Conduct Routine Reputational Risk Assessments
Conventional threat assessment procedures can, at times, underestimate the significance of reputational risks. Such assessments even have the potential of overlooking the risk altogether. As your assessment protocols look into operational risks such as fire, IT glitches and failures, as well as supply chain failures, you also should ensure you consider reputational risks like fraud, customer service issues, professional negligence, and loss of key employees and executives.
You should review your business from an outside-in perspective to discover the scope of the reputational risk. Assess the threats against the company’s core values to determine which pose the most danger and how to address them effectively.
8: Keep Your Employees Contented
As you keep a close watch from external risk, do not lose sight of those that can emanate from within. A disgruntled workforce that is vocal of its dissatisfaction can be a significant contributor to negative publicity.
If you are branded as a bad boss by your employees, then this can tarnish your reputation and that of your company. That is why you should have an HR department that is committed to listening and addressing employee complaints while closing monitoring staff satisfaction, treating everyone fairly, and debriefing outgoing employees to know what could have been done differently or better.
9: Incentivize Employees To Guard Your Reputation
Your strategies for increasing awareness of reputational risk should also consider the role performance management can play in reducing such threats. For instance, the employees can be encouraged to make valuable contributions by actively being the ‘eyes and ears’ of the company. But you also will need to incentivize them to take up such a responsibility.
10: Monitor Reputation Across Your Markets
It would be best if you kept a close watch over external perceptions, especially those generated on social media. The management teams should learn about new tools (like social media) and how they can leverage them to monitor the business’ reputation across target markets. It is a process that will involve actively listening to all stakeholders on matters that impact your reputation.
11: Focus On Communication And Creating A Positive Image
Building brand awareness or recognition is essential to maintaining a good reputation. It also is crucial in achieving significant market penetration. Every company has a story to tell; some are great at telling their stories than others. That is why company directors and executives should understand the role that the business brand and image play in this game.
To capture a target market, there is a need to be customer-focused, to understand their value proposition, and then come up with a distinctively powerful message. Also, ensure that you offer a solution that answers their need as you also work to improve customer experience. Leverage social media effectively and establish accountability for targeted results. Above all, make sure that you live up to the brand message (promise). Remember that it is the message that analysts, the press, and other communication channels share about your company.
12: Establish Effective Communication Contingencies
You should have robust strategies in place for addressing reputational risks as soon as they emerge. Such a thing ensures that you have a pitch-perfect response. You should figure out which stakeholders you might need to reach out to and how. You then will draft appropriate messaging, briefing, social posts, tweets, and statements regarding the same. Essentially, you should make sure you have a thorough crisis management plan in place for when your reputation is on the line so that you can have a quick and effective response to the threat.
13: Learn From Mistakes – Yours and Others’
Lastly, you analyze many of the major corporate reputational disasters that have occurred in recent years. They are textbook examples with many lessons you can learn and the best practices that you can adopt.