Risk 360

Effective Ways for an Organisation to Manage Reputational risks

Building a Brand has always been the prime concern for any organization. This goes into the concern of maintaining and developing the reputation of the organisation which might face several risks in the maintenance of this reputation. Reputation is important in business because it allows companies to differentiate themselves from their competitors. A positive reputation can help companies craft better product offerings and could translate into higher sales volumes. An organisation must know how to reduce reputational risks for them to maintain their profile and status in the market.

The higher a company’s profile, the more at risk it is for reputational damage and the more important it becomes to manage both reputation and risk. You can only define and manage reputation with several reputation risk assessments when you are aware of where your vulnerabilities lie.

But how do we know which vulnerabilities to monitor? The answer is that monitoring all vulnerabilities is impossible so we must identify those that have the biggest potential impact on our business. Once identified, these risks deserve attention in regular audits or assessments.

The effective ways to mitigate reputational risks are:

  1. Internal auditing – This is a technique used for identifying weaknesses and security breaches in organizations. It can be used as a check and balance process to make sure that the controls based on information security standards are functioning as intended.
  2. System security audit – This technique uses tools and techniques to determine the security vulnerabilities of computer network systems such as firewalls, IDS software, routers, switches, operating systems, or applications.
  3. Penetration testing – This technique involves a team of ethical hackers that launch an attack on a computer network system to mimic the activities of a malicious hacker in order to identify security holes and security vulnerabilities.
  4. Mystery shopping – This is a process where auditors who are not known to the employees or management visit stores, restaurants, banks and other locations posing as customers or clients. They then report back on the quality of service they received while conducting transactions at these places.

When it comes to monitoring news, most organisations have a line or two in their communications strategy that notes that they are planning on monitoring relevant developments. In reality, though, they are not paying attention to what is going on around them.

In particular, companies in many industries need to monitor the news when it comes to their reputation. Some industries such as tourism and hospitality face particular reputational risks due to the increased power of social media. As a result, companies that fail to monitor these channels can see an erosion of their reputation overnight. The talk about moral hazard and corporate accountability is real and has direct impacts on the bottom line. Hence, with the help of reputation risk management, you can hold your position and prevent any sort of damage that can happen in your organisation.

References

https://www.clearrisk.com/risk-management-blog/manage-reputation-risk-0-0

https://www.rmahq.org/how-to-manage-reputational-risk/

 

Blog Published By: Siri Harshitha, Student Risk Committee 

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