COMPANY VALUE
Unprepared boards play fast and loose with reputation risk
Owners of small businesses typically know this intuitively and manage it all the time
The vast majority of the value of companies today is in their reputational goodwill. The risk of losing this value is now acknowledged as the "risk of all risks". And yet, while a solid and sustainable reputation is today’s foremost competitive advantage, most boards struggle with putting in place reliable processes to identify, assess and proactively manage reputational risk. Easy access to information through the internet and instantaneous dissemination of opinions through social media have significantly amplified the opportunities and risks associated with reputation. Most boards seem to live in the vain hope that scandals won’t happen to the companies they are entrusted with. In the case of reputational disasters, this is particularly negligent as the response to such a crisis often matters more than the event that caused the crisis. Nothing is more difficult than keeping a clear head when a crisis hits and the company is unprepared. Without a solid reputation, the company will ...
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