I just read an interesting article in the Business Report which stated that the global financial crisis is largely the result of financial institutions not taking risk management seriously.
The article contained a number of interesting pointers and is based on a KPMG survey on risk management in banks which was released on Monday.
The article states that risk management was just a support function and an interesting finding was that though risk management programmes exist, there were shortcomings in their approach.
This correlates with my experience in teaching understanding about reputation risk. Worldwide reputation risk is seen as the one risk that is the most difficult to define and manage. Therefore it is often left to chance and dealt with post event.
It just goes to show that if there are problems existing with traditional risk programmes, then reputation risk is even less understood and managed.
In my master class workshops I show the audience three ways to define reputation risk. It is only then that the reality dawns on them, how to mitigate it.
(If you are interested in learning more about Reputation Risk, and whether it is a strategic risk on its own or just a consequence of a risk, register for my next Reputation Risk Management Master Class).