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Protecting reputation as increased reliance on vendors intensifies opportunities for reputational damage
The views and opinions expressed in this article are those of the thought leader as an individual, and are not attributed to CeFPro or any particular organization.
Sean Miles Head of Operational Risk, Shawbrook Bank
In what ways can institutions effectively manage reputation risk within supply chains?
Firstly, organisations need to understand their supply chain and they need to keep up to date with changes in the supply chain. Then, organisations need to think about the knock-on reputation impacts if one of their suppliers suffers adverse reputation.
If a major supplier to most financial services, say AWS or Microsoft, suffers a reputation issues it’s unlikely to cause an issue at any individual organisation. However, if a particular supplier closely associated to a specific organisation suffers a reputation event then that is likely to result in an impact, this could blow-back on the organisation in question. However, if you are the major customer of a small supplier or charity and you cease dealing with them, causing them to retrench you are also likely to suffer reputationally. Organisations should roleplay such scenarios to determine where reputation impacts could arise.
What key statements can an organisation implement to manage its reputation risk? (Should this be statements or actions?)
Paraphrasing a famous quote, “Brand and reputation takes years to build, seconds to destroy and a generation to repair.” Having a suite of good, pre-prepared statements ready to react to a range of events is good practise and can enable an organisation to react promptly to an emerging event. It takes the blink of an eye for an event or issue to go viral and sometimes there is no rhyme or reason why one event goes viral and another doesn’t.
In addition, if organisations are going to make ESG, Modern Slavery, ABC etc… statements on their websites they need to ensure they can back these up. Green-washing is already prevalent and customers and stakeholders will quickly see through statements if organisations don’t live their culture.
How can developing data, insights, and operating models to back up pledges help with reputational risk?
Organisations have a choice, they can perform risk assessments with data or intelligence of they can rely on qualitative assessments. This is analogous to individuals choosing to study astronomy or astrology. I’d always go for the scientific approach and use data, intelligence and models to assess reputation impacts.
It can be difficult, but reputation impacts can be tracked through social media and other media commentary as well as internal data such as complaints. Remember only one in 25 customers complain and customers who receive a bad product of service are likely to complain to 20 of their friends. So if you multiple every complaint by 500, you get an idea of the reputation impact of poor service of product failures.
What implications do sponsors of the Qatar world cup face?
The sponsors of the Qatar world cup are publicly associated with Qatar. Such association will be amplified during the world cup with all the associated paraphernalia. It’s already been quoted that completing a panini sticker book could cost £883!
Also, we have already seen commentary relating to construction deaths and Qatar’s position on human rights; this is likely to intensify and crystalise when the world cup starts. David Beckham’s recent promotional video resulted in some negative commentary; though whether that has a commercial impact on the brand ‘Beckham’ remains to be seen. He, and others’ have so far avoided a ‘Ratner’s’ moment.
I think all the sponsors need to have contingency plans in place and template statements ready to react quickly to any arising issues.
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