Reputation Risk Antennae

May 10, 2008

Reputation Risk Antennae

I guess there is something for everyone and every profession. I have blogged before about reputationdefender. The company (whose slogan is “watch your back”) helps individuals and families defend their reputations by getting negative comments taken down from the Internet, lowered in the search rankings or explained more accurately. They counsel individual and organizations on strategies for removing harmful information which is ultimately a good thing. Now there is politiciandefender.com for those politicos who need to counter negative or untrue bloggerisms with truthful messages. As the site says, “The program is designed to build personal branding online and minimize harmful blog posts that would influence an election. Our company allows politicians to hire our bloggers to create posts on social media venues and blogs throughout the Internet in an effort to get the target message across.” In essence, the company will counterpunch or should I say counterpost right back when a politician’s reputation is being pummeled. I guess there truly is something for everyone and expect soon to see celebritydefender, professordefender, prdefender, lawyerdefender, doctordefender, cashierdefender, computerhelplinedefender, etc. You see where this is going. 

On another subject, I am often asked what companies should do to reduce their ever-mounting reputation risk. As corruption, fraud, recalls, security breaches, tainted products and financial wrongdoing continues to escalate, one idea that deserves serious consideration is assigning reputation risk responsibilities to company boards, officers or outside firms. UBS recently announced that they would establish a stand-alone risk committee as part of their board restructuring. This committee would be responsible for assessing and being informed about management’s strategy for monitoring and managing corporate reputation threats.  Financial Week has an excellent article by Jeff Nash on how companies are now in the hunt for hiring chief risk officers and fully understanding their own risk scenarios today. He quotes Spencer Stuart who told him that only 3% of S&P 500 companies had stand-alone risk committees as of 2007. That is not encouraging. Apparently Bear Stearns and Northern Rock had separate board risk committees which does not fill me with much confidence that they work as well as they should.

So what are the alternatives? I like the other ideas that surfaced in Nash’s article. Pitney Bowes reportedly has a list of 60 risk categories which are assigned to individuals who report about them to a board committee. Pitney Bowes thinks that when a particular risk or two is assigned to an individual, they are more likely to be accountable and take this oversight seriously. I agree that being able to focus on a few risks makes more sense in determining threat-levels than having to worry about 60+ risks all at once.  The article also raises an idea from a governance expert who suggests that a non-board risk committee comprised of select company executives and outside risk experts could work. I definitely see value in that idea as well because outside points of view are often critical in shaking up organizations who are rightfully concentrating on the next quarter and next customer demand. It is not easy.  

Risk radar is increasingly imperative today. Have no doubt about it.

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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

2 Comments
  • Joseph Fiore
    Posted at 16:15h, 15 May Reply

    Hello Dr. Leslie Gaines-Ross,First time stopping-by your blog – great post!

    On the issue of managing risk, I found this post interesting for two reasons. The first is that as a vendor in the online reputation monitoring (ORM) space and maker of ORM tools like RepuTrace, we are constantly striving to achieve the best possible ways to identify risk, and to properly apply metric and value judgement to more important matters of online risk. The second is based on my belief that metric’s best point of reference is context, and I think that in order to make the two meaningful in terms of developing some kind of “risk radar”, the right balance of careful review, weight of intensity/influence and human judgement needs to be struck between the two.

    Where I see the most opportunity for maturity within the ORM space is in terms of melding the two (metric and context) to arrive at some level of interpreting risk. I have blogged about this topic to some extent in the past, but the points you raised here articulated to a much greater extent some of the relevant points and challenges of assigning categories of risk.

    While I’m in complete agreement about using categories or some type of score to interpret risk thresholds, I’m also of the view that each business is unique in its tolerance to online risk. When speaking of reputation risks, I can see ORM vendors flocking to incorporate risk interpretation if they haven’t already done so – the only question will be whether the approach they use will rely more heavily on automated or machine analysis rather than human review.

    Joseph

  • Martin Edic
    Posted at 21:17h, 28 May Reply

    Part of the issue is the speed with which reputations can be affected in social media, not just blogs but Twitter, YouTube, social networks etc. This stuff travels faster than conventional search can track. That’s why you need social media monitoring tools (I’m biased of course- we have a great one), tools designed to monitor and analyze what people are saying about brands and reputations across SM.The other side is the action(s) taken. pitching and developing blogs won’t work- you need to participate in the conversation, really participate. Not such an easy thing to do.

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