Navigating the challenges and risks of reputation management
Navigating reputation management
Reputation management can no longer be a purely defensive strategy. With an increased focus on how a company is perceived and it’s potential impact on success and longevity, it now warrants specific, board-level commitment. Reputation management is critical for organizations as it can have a significant impact on their success, value and longevity. A company’s reputation directly can influence the decisions of customers, investors and potential employees and criticially, must align with its values. It is vital that leadership teams are aware of how their external brand is perceived and the risks of not proactively managing it.
Who has responsibility?
The responsibility for reputation management ultimately falls on the shoulders of the organization’s leadership team, particularly the CEO. Functionally, it will typically sit within Risk, PR or Marketing, however we are seeing a small number of companies appointing a dedicated Chief Reputation Officer to the board or Exco. The bottom line is, reputation management is the responsibility of everyone, and needs to be addressed as a commercial, board-level, business imperative.
No aspect of the business is exempt from reputation management, including overseeing the impact on capital markets, employee value proposition, talent retention, monitoring the alignment of the supplier group, and culture. This takes into account the actions of team members, social issues like parental leave, environmental impact, the gender pay gap, and messaging. Take cyber as an example, although technically the responsibility of the CIO or CISO, the reputational damage caused by breaches in data is far reaching and can destroy trust.
The public face
With today’s technology and the miriad of digital fascia an organization has to maintain, the potential risk is exacerbated. Damaged brand perception and loyalty can seriously impact share price. Consumer issues can be small, but left unaddressed, they can quckly spiral into a lasting legacy of negativity.
It can be almost impossible to repair broken trust and a tarnished reputation but it is equally a missed opportunity not to develop a strategic approach before a crisis arises.
Every employee should be aware of the importance of maintaining a positive reputation and take actions that align with the company’s values and goals. By fostering a culture of transparency, ethical behavior, and customer-centricity, organizations can proactively manage their reputation and avoid potential damage caused by negative incidents or perceptions.
Organizations need to have a clear purpose that runs through every part of the business, internally and externally, in order to shape the future of strong, sustainable, leadership.