The Global Risk Management Survey by AON is out for 2015. I always look forward to learning what is keeping 1,400 global risk management professionals up at night. This year, damage to reputation/brand is number one, having moved up from number four one year earlier. The report lists several reasons why reputation harm is so high on the list of these professionals –“product recalls, data breaches, offensive language on apparel and in customer communication, fraud investigations, money laundering charges, inappropriate remarks or behavior by company executives, and supply chain disruptions.” That is a whole host of high profile reputation risks that befell organizations in the past year and are probably boosting concern around reputation loss. The fact that reputation damage is now #1 and cyber risk has now moved into the top 10 risk list is no coincidence. We have seen several major Fortune 500 companies lose reputational status in the past year due to data privacy issues and cyber hacking. The convergence of digital exposure and reputation could not be higher.
- The following industries listed reputation damage as their highest risk: aviation, banking, food processing, education, non-profit, real estate, telecommunications.
- Reputation damage was the number one risk in every region except Europe where economic recovery/slowdown was top of mind.
- In deeper analysis, AON found that four key business risks are strongly connected and can have “a multiplier effect on company valuation and ultimate survival” — reputation, failure to innovate, cyber risk and interdependency.
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