Companies lack confidence in third-party risks

The global survey found less than one in five global companies are confident when it comes to protecting against and responding to reputational risks.

Only 19 per cent of companies award themselves an “A” grade for their ability to manage such risks.

The survey found companies are least confident when it comes to risk that is beyond their direct control, including third-party/extended enterprise issues (47 per cent), competitive attacks (44 per cent), and hazard or other catastrophes (44 per cent).

However, most global companies (76 per cent) are confident that their reputations are strong, according to the 2014 Global Survey on Reputation Risk conducted by Forbes Insights on behalf of Deloitte.

The global survey of more than 300 executives found that 39 per cent of companies rated the maturity of their reputation risk management programs as either average or below average.

Yet such programs are critical to the bottom line and an organisation’s ability to rebound from a hit to their reputation.

Respondents from companies that had previously experienced a negative reputation event reported that revenue (41 per cent) and loss of brand value (41 per cent) were impacted most.

Harvey Christophers, national managing partner of risk services at Deloitte said companies are concerned about the consequential effects that escalating reputational issues can have.

Almost 90 per cent of executives rate reputation risk as more important or much more important than other strategic risks their companies face,” Mr Christophers said.

“And, 88 per cent say they are explicitly focusing on managing reputation risk, with more than half investing in brand monitoring tools, crisis management and scenario planning to do so,” he said.