Over the previous two decades, the globe has altered drastically. Gone are the days when the daily newspaper and the six o’clock evening news were your sole news sources. Any form of news (good or bad) may go viral and reach global dimensions in minutes thanks to the power of social media.
A company’s reputation may be shattered in an instant, owing to media coverage of a disgruntled customer or a news story of unethical action. Or because of a corporate breach that revealed consumers’ data that the firm had committed to secure, or because an employee said something unacceptable on social media.
Most Important Types of risks related to Reputational Damage
The Internet and Social Media
The use (or misuse) of social media by an imprudent employee, an agency, or the firm itself may be a double-edged sword that can ruin a company’s reputation. Alternatively, how followers and the general public utilize it in response to corporate activities or events can be a trigger for undesirable consequences.
Everyone in a firm should be considered a possible risk, from the employee who makes a racially offensive comment on social media to the CEO who is accused of sexual misconduct. Employee activities pose the greatest damage to a company’s reputation, according to several experts.
Loss of data
Data breaches are one of the most common ways to lose your consumers’ confidence and harm your brand’s reputation; just ask NetReputation, an Online Reputation Management Service, for example. It also doesn’t help that it can put a corporation on notice in front of politicians and authorities.
Pricing & Services
Regardless of its business strategy or industry, a company’s image will suffer if it underperforms, overcharges, or employs sleazy sales tactics.
Crucial approaches to reducing the danger of reputational harm
Let’s look at some approaches to help limit the dangers and implications of reputational harm now that we’ve been cruelly reminded of them.
Board supervision that is strong and effective
When it comes to managing reputational risk, the process must begin with the Board of Directors. Active and rigorous Board monitoring is required when it comes to the formulation of the strategy, its implementation, and the establishment and enforcement of the policies that go along with it.
Including risk in company planning and strategy development
When it comes to company planning and strategy, risk must be at the forefront of one’s mind. When the risk is included as an inherent part of the strategy and business planning, it encourages a more deliberate approach to taking risks.
Image and brand creation are all important aspects of effective communication.
To flourish in the market, you must tell your company’s narrative and develop your distinct brand. An Online Reputation Management Service looks at all these aspects and starts acting accordingly.
Ethics and compliance are ingrained in the company’s culture.
A culture of ethics and compliance that starts at the top and spreads across the business is required. Policies, procedures, escalation processes, and frequent pulse checks that assess the tone, particularly in the middle and bottom, must all be part of this culture.
Consistent public reporting
Investors pay special attention to concerns with financial statement public disclosure. Restatements, factual disparities, and poor accounting methods can raise investor suspicions and put an unfavorable light on a corporation.