Reputational Risk overtakes Regulatory Compliance Risk

A recent survey of corporate boards of directors by EisnerAmper was conducted to determine the concern levels for different types of risk for a wide variety of companies. Not surprisingly, they found that reputation risk was the #1 concern for most board members:

“Reputational risk has overtaken regulatory compliance risk as [boards of directors] primary concern. Directors identified the various risks that were most important to their boards with 69 percent identifying reputational risk as most important. This percentage skyrockets with the addition of their concerns about the elements of reputational risk including IT risk, product risk, outsourcing risk, privacy and data security, and risk due to fraud.”

In essence, most directors are more concerned about reputational threats to their company, on the Internet or otherwise, than they are about IT risk, data security, fraud, and more. Companies need help keeping their reputations intact in a world where anyone with an Internet connection can defame their company or misinform thousands of potential customers about their products and services.

Steven Kreit, Partner at EisnerAmper, had this to say about the report:

“Protecting brand, company and personal reputation is not a new concept. However, its heightened awareness along with concerns on privacy and data security, IT, outsourcing, product failure and fraud have made reputation a focus of American boards. Operating in a viral world where information and data travels at incredible speeds makes this issue the most impactful with enormous ramifications.”

Just a few bad reviews or a couple of maliciously planted reviews on a scam or ripoff site, can mean large losses in profit if potential customers believe what they are finding through a quick Google search. That’s why reputation management is so important. If current and potential customers trust your brand and your company, they will continue to buy from you. If their trust is shattered by the rant of a disgruntled employee, the cost to your company could be enormous.

Reputation management can help deal with those potential problems by helping positive information about your company move to the top of a Google search, in turn pushing negative reviews down. Reputation management consultants can show you how to best approach online reputation repair and recover your image as well as the respect of anyone searching the Internet for information on your company, bringing you more customers and higher profits.