Reputation Reality

Hilary Tuttle

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September 12, 2013

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This summer, Paula Deen taught us more than new uses for butter. As endorsement deals fell by the wayside and litigation loomed, the Food Network star’s multimillion-dollar loss proved the stakes of reputational risk. In fact, the new study “Reputation at Risk” from ACE Group found that 92% of companies believe that reputational risk is the most difficult type of risk to manage. While 81% of companies surveyed consider reputation to be their most significant asset, most admit that they struggle to protect it. More than 68% of executives surveyed believed it was hard to find advice on managing reputational risk, and over two-thirds felt inadequately covered by insurance. Companies need to evaluate the impact of corporate reputation and develop plans for managing this risk. According to ACE European Group President Andrew Kendrick, this is something the insurance market can address more holistically by involving the input of PR specialists and developing crisis management plans. “More generally, professional risk engineering can help to improve risk management processes and governance, allowing clients to manage the more ‘traditional risks’ better and reducing the likelihood of a reputational event in the first place,” Kendrick said.

Hilary Tuttle is managing editor of Risk Management.