An off-the-record executive discussion, which took place in central London on February 26 2014. This is a summary of the views of 17 executives from the retail, banking, oil & gas, consulting, hospitality, and legal sectors. The discussion was organised by Tobias Webb of Stakeholder Intelligence and sponsored by Risk2Reputation

1.
Roundtable
Event:
“How
to
Manage
Business
risk
through
Reputation”
An
off-­‐the-­‐record
executive
discussion,
which
took
place
in
central
London
on
February
26
2014
Meeting
notes
and
concluding
bullets
Below
is
a
summary
of
the
views
of
17
executives
from
the
retail,
banking,
oil
&
gas,
consulting,
hospitality,
and
legal
sectors
• Sharing
the
‘outside
in’
perspective
of
stakeholders
is
key,
particularly
at
board
level,
to
provide
a
counter-­‐balance
to
the
corporate
received
wisdom
• Leadership
is
about
what
you
do
when
there
is
a
decision
to
make
beyond
the
book
of
rules
• In
the
hotel
sector,
intangible
asset
value
is
huge,
given
the
wide
degree
of
franchising
• Some
view
reputation
is
a
‘second
order’
risk,
as
it
is
often
the
result
of
the
manifestation
of
another
risk
• However,
there
are
other
clear
examples
(McDonald’s
crisis
over
child
marketing)
which
were
clearly
driven
by
reputation
only
• Protecting
reputation
is
about
identifying
challenges
before
they
become
a
catastrophes
and
relying
on
your
business
values
to
guide
you
through
the
crisis
• Much
of
the
fluctuation
of
risk
in
business
can
be
managed
if
executives
have
financial
and
stakeholder
sentiment
data
in
advance
• Individual
stakeholder
sentiment
is
very
different
from
overall
reputation,
which
is
the
aggregate
of
all
relevant
parties’
opinions
of
an
organisation.
Likewise
resilience
is
not
the
same
as
reputation
and
can
only
be
built
on
sustained,
high
regard
• Senior
managers
in
many
businesses
are
delusional
about
how
they
view
reputational
risk.
Many
believe
it
still
to
be
a
PR
issue
not
an
operational
issue
• Managing
culture
change
to
put
financial
metrics/numbers
on
risks
to
reputation
is
vital
to
solving
that
problem
of
delusion.
• Companies
who
try
too
hard
to
be
loved
have
further
to
fall,
particularly
if
they
believe
their
own
hype
but
fail
to
deliver
• Investors
in
large
oil
and
gas
companies
ARE
now
listening
to
external
stakeholders,
such
as
NGOs,
as
much
as
other
sources
when
it
comes
to
asking
questions
about
risk
management
in
IR
meetings.
• With
regard
to
the
integration
of
reputational
risk
two
way
communications
is
vital
to
moving
from
reactive
to
proactive
risk
management.
Risk

2. •
•
•
•
•
•
•
•
•
•
•
•
•
management
must
be
positioned
as
an
‘enabler’
rather
than
a
‘blocker’
in
decision
making
Business
units
must
own
risk
and
consult
with
communications/reputation
risk
experts
at
an
early
stage
in
the
commercial
planning
cycle
Cross
discipline
collaboration
on
taking
stakeholder
perspectives
into
account
(risk
management,
reputation,
R&D,
design)
is
a
major
factor
in
protecting
value
and
improve
risk
management
One
excellent
example
of
awareness
of
risk
is
that
a
firm
X
(a
major
gas
company)
had
sold
its
logistics
network
but
maintained
branding
on
the
lorries.
Risk
management
did
not
see
this
as
a
risk.
Stakeholders
did
-­‐
as
liquid
natural
gas
tankers
can
explode
in
a
community.
If
the
gas
firm’s
logo
is
on
that
vehicle,
it
represents
clearly
both
a
public
relations
and
a
management
issue
for
the
company
concerned
The
Bank
Account
of
Goodwill
analogy
used
in
CSR
works
well
in
reputational
risk.
Sometimes
to
advance
strategy,
you
will
need
to
make
withdrawals
and
lower
reputational
resilience;
other
times
you
will
need
to
invest.
The
key
is
understanding
the
firm’s
overall
reputational
resilience.
The
Rana
Plaza
disaster
demonstrated
that
companies
which
were
engaged
in
actively
managing
risk
were
able
to
respond
better
to
the
disaster
and
have
been
clearly
regarded
more
favourably
since
the
incident
Reputational
risk
can
be
managed
more
effectively
when
clearly
linked
by
management
to
business
continuity,
with
costs
associated
with
reputational
loss
and
gain
Balance
is
key
in
managing
risk:
When
you
make
risk
management
everyone’s
job
you
can
easily
blur
the
lines
between
good
decision
making
and
efficient
business
practices.
i.e.
if
everyone
queries
all
decisions
for
risk
reasons
you
may
have
much
slower
decision
making
Managing
reputational
risk
is
both
an
art
and
a
science:
Whilst
storytelling
is
key
to
making
lessons
stick,
KPI’s
showing
the
disciplinary
risks
to
individuals
are
also
key
A
risk-­‐attuned,
aware
and
outside
engaged
corporate
culture
is
vital
to
help
spot
“Black
Swan”
events
and
warn
of
important
reputational
risks
The
best
“meta
risk”
indicators
that
a
firm
holds
is
its
level
of
reputational
resilience.
When
starting
out,
a
series
of
small
steps
to
build
the
business
case
for
better
collaboration
between
risk
and
reputation
management
is
optimal,
followed
by
internal
communication
of
the
results
There’s
a
clear
separation
problem
in
many
companies
between
data
collection,
where
it
exists,
people
working
on
the
ground
and
the
orders
that
come
from
on
high
Explaining
how
people
fit
into
the
bigger
risk
and
reputation
picture
is
a
major
challenge,
but
it
must
be
a
picture
they
can
recognise
on
a
day
to
day
basis.
Reputational
risk
awareness
must
somehow
be
concrete
for
them
If
management
can
align
reputational
P&L
with
management
KPIs,
and
base
those
KPIs
on
a
reputational
resilience
index
that
is
one
potential,
proven
solution

3. •
•
•
80%
of
the
challenge
is
internal
education,
alongside
company
behaviour,
and
working
out
how
to
make
reputational
risk
count
for
individual
employees,
day
to
day
One
technique
used
successfully
is
a
simple
three
bullet
point
summary
message
to
all
employees
after
an
incident,
so
they
can
remember
the
company
line
and
response
easily
But
the
best
solution
is
to
be
able
to
demonstrate
to
internal
audiences,
especially
top
management,
the
financial
impact
of
reputational
on
value.
Maintaining
a
good
reputation
will
then
become
part
of
decision
making
The
event
was
organised
and
moderated
by
Tobias
Webb
of
Stakeholder
Intelligence
and
Ethical
Corporation.
For
more
information
or
to
inquire
about
further
events
see
tobiaswebb.blogspot.co.uk
or
email/call
tobias.webb@stakeholderintel.com
+44
(0)
7867416646
RiiЯ
(Risk2Reputation)
sponsored
the
event.
RiiЯ
is
a
leading,
research
consultancy,
which
helps
change
excellent
firms
into
resilient
firms,
thereby
protecting
and
enhancing
corporate
value.
RiiЯ
do
this
by
analysing
the
financial
impact
of
reputational
fluctuation
on
value,
thereby
improving
management
decision-­‐making.
RiiЯ
also
help
optimise
resources
within
the
firm
-­‐
from
communications,
risk
management
and
sustainability
executives
-­‐
so
reputation
is
managed
proactively
within
the
ecosystem
of
stakeholders.
For
further
information,
please
contact
Tom
Vesey
at
tom.vesey@risk2reputation.com
,
or
on
+33
6
28
91
00
99.