Now let’s examine some of the elements of such a strategy. What, for instance, is the role of the head of an organisation when it comes to preparing for and dealing with unexpected events? In the corporate world, this would usually be the CEO of the company.
Experts say that the CEO is primarily responsible for managing a company’s reputation. He/she must continually communicate the importance of reputation management to the larger organisation. Each employee should feel like a custodian of the company’s reputation – as indeed, they are.
It is also the CEO’s job to ensure that risk management is factored into everything a company does. In regulated industries especially, it is critical for the CEO to infuse integrity and compliance into the fabric of the company. Compliance infringement is seen as one of the greatest reputational risks. Some years ago, the Economist Intelligence Unit conducted a high-level international survey on risk management. The findings report concluded that the CEO “… is pivotal in providing an ethical identify for their companies. They also co-ordinate the response of other senior managers to reputational threats and crises …”
While the Chief Risk Officer (CRO) bears a large share of the responsibility, the ultimate ownership lies with the CEO. He/she needs to ensure that various departments and people in the company work in tandem to protect its reputation and manage sudden crises. The CRO’s role is more technical: it involves analysing trends, quantifying risks, ensuring compliance, and creating risk mitigation strategies. Some risks can be defused pre-emptively. For instance, if there is a gap between a company’s reputation and its actual character, the organisation is prone to reputational loss. In such a scenario, appropriate action can be taken to stave off the crisis.
The CEO is the standard-bearer of a company’s reputation. It is, therefore, imperative for him/her to lead by example, to uphold the core values of the company, and to prioritise this invaluable asset.
Stay tuned for our next post in the Corporate Reputation and Risk series, in which we will talk about some more key elements of a reputational risk management programme, such as a strategy for unforeseen events and the role of communication.
To see specific case examples and learn how we can help your organisation manage reputational risk, please contact the Baird’s CMC team.