Integralreputationriskpractices

The more diverse, the more regulated, the more geographically dispersed an organization is, the more important an integrated risk management approach becomes.

Due to the overwhelming growth of information and the updated technology in the internet age, reputation management, brand protection, and risk governance become increasingly intertwined and crucial. Every staff has responsibility for their own reputation and corporate reputation; but sometimes reputation goes beyond our control. 

Reputation is part of risk management. It’s important to shift mentality from “risk-avoidance” to “risk management” and risk intelligence, and take an integral approach to manage risk smoothly.

 


The greatest risk will be the business reputation issue that is not being properly identified or managed: The generic risk management includes how organizations manage economic, legal, political, social and reputation risks, and how to build up its resilience muscle. Organizational reputation is the overall estimation in which the company is held by its shareholders based on its past, current, or predictive future actions and behavior. Risk management is very useful for achieving business results and building a solid business reputation. There are "human factors" such as irrational, cognitive, or behavioral aspects. People are still the weakest link in Risk Management, they usually are the greatest source of risk -both classical downside risk and upside risk.

Reputational risk is more as a consequence of the public and media reacting to all the other risks. Thus, it’s important to take an integral risk management approach to improve business effectiveness and maturity. Reputational risks are more likely the post-risk processes of damage control and remedial steps involving corporate communication and public relations programs. Reputational risk is that of the blindness of conventional risk management practitioners to the shortcomings of the incomplete solutions. You can't and won't be able to manage or predict every risk, but by mapping and measuring complex interactions in real-time can gain early warning with anticipatory awareness of possible/plausible negative impact on reputation management.

Integrate risk management into a variety of management approaches by measuring, managing or modeling risks: Often a big risk is that the risk management system is detached from the real management of the business. Why do you think that most risk management has not been done effectively? What are the risk management blind spots? Is it because the risk management program is immature and shortsighted? What to do with this risk even when a risk management program is neither immature nor shortsighted. In reality, too few business enterprises have appropriately aligned or devoted sufficient resources to their respective risk, compliance, ethics, governance efforts, and they need to be appropriately integrated, with decent reporting, structuring and streamlined processes.

Organizations have to shift from a risk-avoidance to a risk management & risk intelligence mentality. Businesses weigh risk and reward, take prudent risks and find ways to mitigate risk rather than eliminate it, and drive change large or small proactively. It’s important to develop an effective risk management model for integrating all crucial elements such as processes, technologies, talent, communication, culture, tools, etc, to manage, and measure risks. Integrating risk management into the everyday business model helps to move the organization a couple of steps forward in business excellence. The value could be in better management decisions, improved operations, greater resilience, improved reputation, increased confidence in management, etc.

Reputation is part of the personal or business brand, and the brand usually reflects the personal and enterprise reputation: The organization's brand equity is the key asset of concern when it comes to the question of reputational risk. If the management has put in place effective GRC processes for protecting business brand and reputation, it helps to clarify what the brand stands for, how the company wants its stakeholders to see and perceive the brand name and the connotation it wants its stakeholders to associate to, as well as the primary activities through which the brand name gets communicated. All of which help to build a solid business reputation.

As a matter of fact, a company's brand is one of its most invaluable assets, and like any asset, it is the responsibility of the leaders to protect and nurture it. The organization's brand equity is the key asset of concern when it comes to the question of reputational risk. Therefore, keep close monitoring of reputation management for transparency and analysis of potential long-term consequences. We are all in this together and have our passions focused on a goal with a cohesive leadership to build a strong business brand and use corporate reputation resources wisely as it directly impacts the long term business prosperity.

The more diverse, the more regulated, the more geographically dispersed an organization is, the more important an integrated risk management approach becomes. Top management commitment is important to build risk awareness culture successfully by integrating a variety of GRC processes for connecting the dots on risk across the orga­nizations, increasing business awareness of “VUCA” reality, and improving business effectiveness.

Posted in: GRC