In banking and in insurance, risk management is primarily a financial process for measuring (and hopefully managing) exposure. To the manager of a nuclear power plant, risk management is all about avoiding physical disaster. Only you can identify where the most fundamental risks to your reputation lie.
Since reputational risk is, in effect, controlled by the perception of stakeholders, the smartest approach is to make a plan to handle it and mitigate it in a controlled way. In most businesses, this comes down to management by the public relations team.
However, reputation, and therefore PRs? impact on it, is an integral part of broader business success. This evolution of reputation into a boardroom issue pulls some traditional public relations people out of their natural communications comfort zone. It is important that you create a channel directly from the communications teams, who are acting as the eyes and ears of the business, into the boardroom.
Good mitigation starts from being well prepared. The only real way to mitigate professional risk is to know what?s going on as early as possible. That means monitoring and listening to what the on and offline world has to say, analysing the data and watching for trends.
This is not to say that mitigating the risk of reputation is just about media monitoring. Perhaps most importantly, it is about gaining deep knowledge about customer satisfaction, employee feedback, complaints and competitors, and taking pre-emptive action.
The Reputation Playbook (Harriman) by Jennifer Janson. Available for £17.99, including postage, from The Sunday Times Bookshop on 0845 271 2135 or thesundaytimes.co.uk/bookshop.