Category: Reputation

Reputation now seen as top strategic risk, says Deloitte survey

Reputation now seen as top strategic risk, says Deloitte survey

via Reputation now seen as top strategic risk, says Deloitte survey.

P.S Will you join us at this event?– The Corporate Reputation Protection Master Class 28 – 29 November. For more info:

10 Reasons Why You Should Attend Reputation Risk Training


Maybe you have wondered why you should attend Reputation Risk Management training. Well, I believe that it is quite simple. Someone in the organisation must champion the cause of why Reputation is an asset and a risk. Internationally these are Board responsibilities, but ultimately Management will be held accountable by the Board for the correct management or mismanagement of this intangible asset.

And, that is only possible if management has the necessary know- how. In the past there was this belief that this was solely the domain of PR, but with time there has been an understanding that Reputation needs a systemic view and approach. My Master Class on Protecting Reputation unpacks Reputation Risk and offers a number of distinct benefits to an individual and an organisation.

Here are my reasons:

10 Good reasons why you cannot, should not, will not miss attending the Protecting Corporate Reputation Masterclass:

1. Did you know that the good name and reputation of a company are priceless assets – sully your company’s name and it may never recover. ‘Goldman Sachs paid a fine of $540 million to the SEC to get the agency’s inquiry off the front pages,’ says John Alan James, executive director of the Center for Global Governance, Reporting and Regulation. ‘Its stock value was plummeting and its top clients were concerned. It was the same for all the big banks, which together paid $18 billion in fines to regulatory agencies in 2012.’ ‘A Company’s Reputation is its greatest asset and risk, and it should be protected at all costs’. Mr David Glass, ex – CEO of Wal – Mart. This course takes a close look at how to protect and defend this asset.

2. Warren Buffet, the world famous investor and richest man has on numerous occasions said these famous words: ‘It takes 20 years to build a reputation and 5 minutes to ruin it and if you understand this you will do things differently’. Why? Well, Mr Buffet understands that money can always be made, but that a reputation, once lost, is not easily restored. In fact, some studies show that it can take between 3.5 to 11 years to restore a damaged reputation. Want to prevent reputation damage before it even gets public?

3. Reputation Risk is regarded globally as a “meta risk – a potential menace to fundamental business strategy, and possibly an even greater hazard to organizational survival than a financial restatement or problematical findings in a compliance report”. Reports suggest that it currently rates as one of the world’s top 3 risk areas because of its volatility and difficulty to manage and mitigate, yet less than 43% of companies surveyed had a plan to deal with reputation risk both from a mitigation and reputation incident perspective. Question: Is your Company ready to deal with a Reputation incident? If you are not sure, take this survey – and attend to learn more tips and strategies to protect your organization.

4. As part of your company’s planning for crises and dealing with reputation risk, have you embedded Reputation Risk into your Enterprise Wide Risk Management system and have you defined reputation risk in 4 different ways so as to determine and implement different perspectives and mitigation strategies? Would you like some assistance with that process? I can guide you.

5. Did you know that this Class integrates best practice and thinking from many disciplines including Reputation Management, Public Relations, Risk Management, Corporate Communications, Corporate Responsibility and Strategic Management, and is a must attend for Corporate Affairs, PR, Risk Managers, Compliance Officers and any staff member responsible for maintaining and protecting a company’s fine reputation. Attend to get a systemic view of this asset and risk.

6. The damage of a reputational crisis can be direct and indirect. These costs could include penalties incurred because of a lack of legal compliance, litigation, media conferences and advertising costs, hiring of crises communication consultants. BUT what about the indirect costs, the effects on various stakeholders? The increased scrutiny leading to additional problems? The customers that do not return? Does your plan of action include both Reputation Incident and Reputation Erosion possibilities?

7. Do you know how to identify reputational risks including the gap between stakeholder’s perceptions/beliefs and the company’s actual performance, areas of vulnerability and current & emerging issues? Studies show that perceptions and concerns of stakeholders was an extremely or very significant issue, making Stakeholder Reputation Risk the highest-ranked challenge – This is one of the definitions we will explore.

8. What is your organization doing to prioritize reputation risks and assessing the probability and the impact of the risk on reputation? Reputation Risk is extremely difficult to quantify. What efforts are being made in your organization to quantify the value & risk of reputation. I will take a look at alternatives that exist inc. monitoring approaches

9. Did you know that you and your organization damage reputation through what you share? Reputations can be made or broken exponentially faster through the use of technological tools to which all stakeholders now have access for the first time. There is risk implicit here and Reputation Managers need to understand the velocity of Social Media risk. Does your Reputation Risk framework and Response plans take the impact and intricacies of Social Media into account? How should you respond to a blog attack?

10. Did you know that Protecting a company’s reputation is part of internal governance (in contrast to external governance policies and procedures which comply with laws and regulations), and is one of the most important responsibilities – if not the most important responsibility – of the board of directors. Research shows that Reputation risk is top of mind for directors.

The ultimate question then: Does your company have watchdog systems and a plan if it is subject to a reputational attack? It is the board’s responsibility, as part of risk management, to ask these questions and to make sure that the answers are sufficient.

The 2 – days will include sessions on how to analyse Reputation Risk using a Root Cause approach to develop ways on how to reduce and respond to reputation risk; How to Monitor and Measure Reputation using a 4 – pronged approach; How to Manage Reputation Incidents and Events using processes and techniques such as pro-activeness, communication and readiness prior, during and after a crisis; and will include information on How to Develop a Reputation Protection and Defence Strategy – based on international best practices and appropriate to your organisation.

More information available:

Reputation at Risk – Does it still matter?

Reputation at Risk – Does it still matter?

Yes it does, and latest international research backs this statement. Not only does it back the statement but the research also reveals a struggle to cope with, manage and mitigate this volatile risk.

For a long time, the debate has raged on. Is Reputation Risk a Strategic Risk or just a consequence of a risk?

Perhaps it is because of the misunderstanding that exist in management circles about it. Just because Reputation Risk is the domain of intangibles, does it make it so elusive that we leave it till it is too late, and then try and patch up the embarrassment with PR and fake apologies? Also, to treat it as a simple consequence is not adequate and indicative of the level of thinking that is needed to deal with it appropriately.

Often Reputation Risk incidents have been water shed moments for companies, necessitating whole sale changes to value systems and modus operandi.

In South Africa, there has been many reputation risk incidents that have damaged the names of individuals and organizations a like. We have had our share of naming and shaming, mamparas and Wikileaks moments.. From unauthorised usage of our airspace by the Gupta family to the huge Construction Industry fall-out and subsequent Competition Commission fines to court cases and huge expenditures on Nkandlagate. The list just goes on unabated, which certainly points to a lack of understanding to manage intangibles and perceptions, to manage reputation risk in the Southern African environment.

So, let’s evaluate some of the latest research findings in search of some answers and direction.

On the 15th July, an article appeared in the Risk Management Professional that was called “Is reputational risk management yesterday’s news”?. The article states that a new survey into the emerging professionalization of reputational risk management tells us quite the opposite. It then quotes the findings of a study from Schillings on reputation risk that brought together a group of key practitioners, including general counsel, communications directors, public affairs directors, group heads of risk and CEOs from over 150 leading public and private companies to try and move the debate forwards. After all, this is a shared concern, and as one general counsel at a FTSE100 company remarked: ’Reputation risk will always touch our business somewhere.’

On the 23rd July – ACE Research publishes the findings of their latest study ‘Reputation at Risk’, which was conducted across 15 countries within its EMEA (Europe, Middle East and Africa) region. This study found that “Reputation is the Hardest Risk to Manage. Their findings reveal that 92% of companies believe that reputational risk is the most challenging category of risk to manage.

This certainly ties in with a 2011 Deloitte report that found Reputation Risk to be a “meta-risk” – The Report stated that Reputation is an important factor across all four major risk areas of the Risk Intelligent Enterprise — strategic, operational, financial, and compliance — especially because it is a constantly evolving and fully embedded as part of the why and how a company achieves its objectives.

In May this year, The Compliance Week wrote and I quote: “After financial risk, reputation risk is the biggest concern that keeps board directors awake at night, according to the latest poll from EisnerAmper via Survey Says Boards Troubled by Reputation Risk.

Ace Research’s findings also revealed that while 81% of companies in the survey see reputation as their most significant asset, most of them admit that they struggle to protect it and identifies a number of key reasons why companies in the region often find reputational risk challenging to manage:

  • 77% of companies find it difficult to quantify the financial impact of reputational risk on their business, making it harder to measure than traditional, more tangible risks. This is understandable as it is a very volatile risk. Sometimes a small incident can have worldwide repercussions, sometimes it will have no effect. I wrote about this in my post – “One Event. Multiple Stakeholder Impacts”.

68% of companies believe information and advice about how to manage reputational risk is hard to find, compounding the sense of uncertainty and confusion about how best to manage it. This carries another element of truth. Without adequate stakeholder profiling and analysis, issues management and systemic thinking, incorrect mitigation might be the order of the day. No longer is PR the only preferred tool to manage Reputation Risk, what about Governance, Ethics and Compliance functions role and input?

  • 66% of companies feel inadequately covered for reputational risk from an insurance perspective. Again the problem exists because you can outsource many risks, but reputation is a risk that is integral to your businesses’ DNA and cannot be outsourced.

56% of companies say social media has greatly exacerbated the potential for reputational risk to affect their business. This is the new world we are living in and it implies more scanning, monitoring and training.

And another report, “With CSR In Global Demand, Corporate Reputation Is At Stake”, (by Cone Communications And Echo Research) stated that CSR is no longer a nice-to-do, corporate social responsibility is now a reputational imperative – or liability. The study revealed in the 2013 Cone Communications/Echo Global CSR Study, that companies are expected to be an active participant – if not a driving force – in solving the most pressing social and environmental issues. Corporations that disregard this consumer-demanded role risk more than their reputation – nine-in-10 global citizens say they would boycott if they learned of irresponsible behavior.  This report shows that CSR is now a direct driver of Corporate Reputation and major cause of Reputation Risk.

The Ace Research findings also proposes a number of solutions to adopt, including:

Companies need a clear framework for managing reputational risk. 

Effective management of ‘traditional risks’ will help avoid reputational events, and management teams need to put in place a culture and instil a risk appetite across the company that will reduce the potential for crises to emerge in the first place. In addition, taking a multi-disciplinary approach that involves the CEO, PR specialists and other business leaders will also help to build the broader perspective that is necessary for identifying and managing less obvious reputational risks.

My thoughts: I found this interesting as this was the approach that I recommended to Vodacom when I assisted them with embedding Reputation Risk in their Enterprise Wide Risk Management system prior to their listing.These recommendations certainly shows up the Construction Cartel and the need for PR/Reputation Managers to be involved earlier in the risk management & mitigation process. It also implies that the help of OD/Organizational Behavior experts is necessary.
Companies should work harder at measuring how their reputation is perceived. Understanding perceptions of key stakeholders, their interplay and their impact on corporate reputation, is essential for tracking and       managing reputational risk effectively. Companies must ensure that they are collecting an “outside-in” perspective to complement their own internal perspective.

Again I rest my case. I have been teaching this in my Stakeholder Reputation Management Master Classes since 2006.
Companies should sharpen up their crisis management plans to keep pace with today’s faster-moving world. Our research suggests that many companies may be over-confident in their abilities to respond to a crisis. Regular review and testing — including the incorporation of social media scenarios — will allow a faster response when disaster strikes.

Again I rest my case. I have been teaching and facilitating the need for Nano-Seconds Crisis Management Plans for a long time – even in China.

The insurance market can do more to help companies manage reputational risk. This includes the provision of more holistic solutions that include crisis response assistance. It also includes helping companies to take a   ‘reputational lens’ to more traditional risks to evaluate the reputational consequences in each case. In this respect I work closely with Business Continuity and Health & Safety specialists to advise my clients.

Andrew Kendrick, President, ACE European Group, goes on to say:

“Reputational risk can be difficult to predict. However, some clear pointers emerge from our research as to the source of companies’ key worries. One of these is the globalisation of business, with complex supply chains, expansion into new markets and the challenge of maintaining consistent standards across multiple borders all giving cause for concern. The other noticeable theme is regulation. Post-crisis, compliance has taken on a new importance and businesses of all shapes and sizes are more keenly aware of its relationship to their corporate reputation.

“Insurance is not a panacea for the fast-evolving world of reputational risk. Nevertheless, I believe there is much that insurers and brokers can do collectively to help their clients. This includes the evolution of new more holistic insurance solutions that involve the input of crisis and PR specialists. More generally, professional risk engineering can help to improve risk management processes and governance, allowing clients to manage the more ‘traditional risks’ better and reducing the likelihood of a reputational event in the first place.

The Schilling researchers asked respondents: ’How useful is your organisation’s formal risk management  process when it comes to protecting corporate reputation?’

The response was mixed. On the positive side many communications directors and general counsel rated the risk process as ‘useful’. Interestingly  legal respondents were significantly more likely to rate the process as ‘very useful’ compared with those from a communications background. Over 30 per cent of communications respondents to the survey felt that the risk management process was either ‘not useful’ or were unaware of such a process.

One risk manager we spoke to at a leading private company gave us an example of how things work when they are going well: ‘In terms of the communications team and reputation risk, it is dealt with in a high-level and strategic manner. The head of communications prepares incident scenarios. As a risk function we input to those scenarios. This helps to make sure that we have communications and incident response plans in place for our major reputational risks’” However, scenario planning is just one part of the picture.

I fully agree. Reputation Risk is inherent in everything we do. It can be positive or negative. But it needs a dedicated approach and robust thinking processes.

To assist leaders with their questions, struggles and issues I will facilitate a Protecting Corporate Reputation Master Class in Johannesburg from the 22 – 23rd August. This 2 – day training course will provide a deep dive into Reputation Risk and will equip delegates with the necessary competencies (knowledge, skills & attitudes) to protect and defend their organization’s most valuable asset – its reputation against potential threats, risk and potential damage, and is based on more than 25 years research and experience on how to protect business reputations.

The course weaves inputs from best practices in Reputation Management, Risk Management, Communication & PR, Crisis Management & Crisis Communication, Ethics & Corporate Responsibility to provide companies with tools and know-how to protect, defend and deal with reputation risk events of any kind, and should provide you with a strategic direction on how to manage reputation risk in your organization.

To find out more on how to register, click here.

What: Protecting Corporate Reputation Master Class
A 2 – day Deep Dive into Reputation Risk and How to Protect and Defend your Organisation and Brand against Attack, Potential Threats and Damage.
When: Thursday, August 22, 2013 8:30 AM to Friday, August 23, 2013 3:30 PM
Where: Apollo Conferencing Hotel

158 Bram Fischer Drive, Ferndale, Randburg
Johannesburg, Gauteng   South Africa

Survey Says Boards Troubled by Reputation Risk – Compliance Week

After financial risk, reputation risk is the biggest concern that keeps board directors awake at night, according to the latest poll from EisnerAmper via Survey Says Boards Troubled by Reputation Risk – Compliance Week.

These days Reputation Risk is a a real threat or danger to the good name or standing of an organization due to the immediacy of the sharing of negative information and the impact of Social Media.

For a long time experts debated whether Reputation Risk was a strategic risk or a consequence of a risk.

What has become clear though is that it is now a“Meta risk – a potential menace to fundamental business strategy, and possibly an even greater hazard to organizational survival than a financial restatement or problematical findings in a compliance report”.

Reputation risk can occur through a number of ways: directly as the result of the actions of the company itself; indirectly due to the actions of an employee or employees; or tangentially through other peripheral stakeholders, such as joint venture partners or suppliers.

In addition to having good governance practices and transparency, companies also need to be socially responsible and environmentally conscious to avoid reputational risk.

This importance has been confirmed through a recent report “With CSR In Global Demand, Corporate Reputation Is At Stake”, according To New Research From Cone Communications And Echo Research: PR Newswire (

 This must – read report shows that CSR is now a direct driver of Corporate Reputation and major cause of Reputation Risk.

Continue reading

Doing Business with Disreputable Companies


Should one do business with a company which once had a bad reputation, but now has new management? Or with a company which seems a little shaky due to a crisis or scandal? Or with known tenderpreneurs, Mamparas, etc.?…

The best advice is to proceed, but with caution. Follow these steps to avoid getting burned:

– Do your homework. Research the company and find out what the market is saying about them. Find out more about their modus operandi. Do a SWOT analysis. Do due diligence of not just tangible assets, but intangibles as well.

– Go slow. Meet with the CEO and/or company representatives. Meet with stakeholders. What is your gut feel about the management and leadership?

– Better still, get outside 3rd party independent opinion. Compare views and perspectives.

– Assess the risk. Compare your feelings and the research you conducted. If it’s positive, proceed.

Be careful who you get into bed with. Remember your reputation might be at stake.

You Better Be Running


Every morning in Africa, a gazelle awakens. It knows that it must outrun the fastest lion that day, or be eaten. Every morning in Africa, a lion also awakens. It knows that it must outrun the slowest gazelle, or starve to death.

The moral of the story is this: Whether you are a gazelle or a lion, when you wake up, you had better be running. In today’s fast moving knowledge economy you better be building and protecting your reputation. You only have one chance at making an indelible impression.

– Anonymous

The Value of Policies in Protecting Reputation

What is the value of policies, especially in terms of building, sustaining and protecting corporate reputation?

The value of policies is immense. It sets a framework for people to operate within.

Prevention of reputation related incidents in an organisation is one of the least costly and most efficient means of protecting a treasured reputation, but usually the most overlooked. Preventing in the first place, the types of defects that can badly tarnish or destroy a reputation saves an extraordinary amount of anguish, time, effort and money.

Prevention starts with the published policies, guidelines and procedures that all organization employees are expected to follow and implement. These published policies, guidelines, and procedures should be a reflection of the reputation that the firm wants to achieve. If a company wants to be known as a safe and friendly place to work, its policies should assure employees won’t suffer from discrimination, harassment or safety issues. If a firm wants to be a good community neighbour, its programs should allow employees to contribute and participate in community programs and services.

However there are a number of important principles to remember when writing, distributing and implementing policies.

– The mere fact that a policy has been written and distributed is no guarantee that buy-in into the implementation will occur. How will you measure adherence to the policy?

– How can you ensure that I as the recipient of the policy understand and will act on the content?

– Has your policies been benchmarked against best practice, environmental context (An USA Policy may not work in Arabia)

Measurement of compliance needs to be built into the design phase, delivery, and implementation and distribution phases.

You cannot leave it to the Internal Auditors to report six months later that a policy is not working due to the following…..

7 Compelling Reasons to Educate, Train and Develop your Employees About Reputation Management


Managing an organization’s reputation may be the most important asset a CEO and his or her team manages – as a good reputation helps a company to attract business, investors, hire and retain the best employees, partner with other leading organizations and lower the cost of capital.

Reputation must be built from the INSIDE OUT, and encompasses everything that the organization says and does. Reputation is an intangible asset at risk on a daily basis.

Recent studies show that it can make up as much as 63% of a company’s market value. According to Steve Hamilton-Clark, CEO of TNS MENA “Reputation capital is the sum of the value of all corporate intangible assets, which include business processes, patents, trademarks, reputations for ethics and integrity, quality, safety, sustainability, security, and resilience”.

He goes on to say that “Indeed, companies must understand and influence the relationships they have with stakeholders – from customers, investors, business partners, influencers, the general public and employees. The ability to attract, maintain and motivate talented employees, as well as customers rests in a good reputation.”

Psychologists tell us that awareness precedes behavior change whilst the term preparedness refers to the state of being prepared for specific unpredictable events or situations. Awareness and Preparedness are therefore closely linked.

The level of preparedness is depended on the cumulative deposit of knowledge or the sum total of the learned behaviour of a group of people. This awareness that the psychologists talk about is created by knowledge and knowledge is acquired through information. (Even this process is fraught with danger – remember the Desert Survival or NASA team building exercises that some of you have done on Leadership training).

Therefore awareness can play a huge role in protecting and nurturing your organisation’s biggest asset and risk. How would a manager know whether he or she is adding or subtracting to that value, unless he or she has been made aware?

The next time your organization meets to decide what the training goals and priorities should be, ask yourself: “What are we doing to ensure that our managers understand the creation and protection of our Reputation”?

A good reputation means your name is trusted. You are considered a sound investment, purchase, trusted partner, and employer. All of this dramatically impacts the organization’s bottom line.

So, here are 7 compelling reasons why you should educate, develop and train your staff in reputation management principles.

1. To ensure that your business is well-positioned especially when reputational surveys such as the World’s Most Admired Company and Annual Best Employer surveys are conducted. Those businesses that obtain better scores, also have better revenues and a more sustainable footprint.

2. To remain competitive. If your employees are knowledgeable and motivated, they will build your reputation in a very competitive marketplace, and stakeholders like to do business with winners.

3. To understand your stakeholders needs and concerns and find ways to wow and engage them. You need to maintain good relationships with them and gather their support and trust.

4. To enable your employees to stand back from the day-to-day operations and understand the strategic implications of their work on the company’s largest and most important asset, and yet, biggest risk.

5. It sends one of the most powerful messages to your employees – that they and the organization’s reputation are valued. When your employees are anxious about maintaining the reputation of the institution, it is more important than ever to demonstrate a commitment to them, by giving them the know-how and understanding to manage that asset and risk.

6. To avoid Reputation Risk. When employees understand the value and risk of reputation as an asset, they will think twice before destroying it.

7. Training increases productivity in the short term, as well as the long term. It enhances reputation.

Think back to your own experiences. What a pleasure to deal with employees that are dedicated , focused and competent. The sooner you engage your staff, the earlier you can address and deal with the issues that may affect your reputation.

Read this post Education & Training Programs Woefully Reputation Deficient for more provocative insight based on research.

Should Reputation Management Training not feature on your company’s Training agenda? Are you leaving the deliberate management of this asset to chance?

One Event, Multiple Stakeholder Impacts

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Just a storm in a teacup! How often have I not heard CEO’s say this, only for the share price to be 20% down a day later!

Normally these are the visible signs, but a crisis poorly handled, have a wider impact than most managers anticipated. Look at the following model.

A single risk event is likely to have multiple impacts on a company‘s reputation. To understand this, imagine that XYZ Corporation has been fined by the Competition Commission for price fixing and allegedly engaging in unfair and predatory business practices.

News of the lawsuit is picked up by major media outlets, which run exposés on the company and how it has taken advantage of its customers.

The list below gives examples of how different stakeholders may react to this single lawsuit.

Current Customers – Possible Action: A number of customers believe they have been taken advantage of, and they refuse to do business with the company again. Other customers, who may not even be part of the lawsuit class, decide to cut back on their business or switch to new, aggressive competitors.

Potential customers – Decide not to do business with the company.

Suppliers and partners – Decide not to enter into an alliance or demand more favourable terms because of discomfort at being associated with the company.

Employees – Not wanting to be associated with a company that takes advantage of its customers, or believing that future opportunities at the company are limited, decide to take other jobs.

Financial markets and lenders – Believe the growth prospects of the firm are limited or even worse, that the business model is no longer valid. Discount the share price and demand more onerous lending terms

Government regulators – After a few politicians make speeches mentioning the fine, an aggressive regulatory agency puts a team of lawyers on the case to decide whether the company has broken the law and should face further fines or limitations on doing business

The downside of failing to meet stakeholder expectations can be enormous. In many cases, brand equity value is the single biggest component of a company‘s market value, even exceeding book assets.

Sixty-three percent of a company‘s market value is attributed to reputation (Weber Shandwick/KRC Research, Safeguarding Reputation, 2006).

The growth of the Internet-powered economy has dramatically raised the importance of reputation. Today, the velocity of information flow has increased to a level unthinkable in the years before the proliferation of websites, blogs, e-mail, instant messaging and other Internet-powered communications. In this environment, we say: Semel emissum volat irrevocabile verbum (Horace).

Loosely translated, this means that once the word is out, it has flown and cannot be brought back. In today‘s wired business environment, positive events may bring incremental benefits, while negative perceptions can spread like wildfire, with devastating results to a company‘s reputation and, ultimately, its shareholder value.

While a company‘s reputation can be harmed by a single major event, more frequently, reputations are harmed over time by “erosion” – slowly chipped away by one unsatisfactory stakeholder interaction after another. For example, dissatisfied customers are more likely to do less business with a company than they are to abandon it completely. Yet the cumulative impact of these decisions can be profound.

Question: Can you really afford to not manage your stakeholders? No wonder that, in the King 3 Code specific mention is made of the importance of stakeholder inclusivity (,i.e. that the legitimate interests and expectations of stakeholders are considered when deciding in the best interests of the company), stakeholder identification and determination of expectations and needs, the proactive management of stakeholder relationships, and that management should develop a strategy and formulate policies for the management of relationships with each stakeholder grouping.

To learn more about how to manage and engage stakeholders, you should consider attending the following event:

What: Stakeholder Reputation Management Master Class
This intensive 2-day training seminar explores international best practice approaches to Stakeholder & Reputation Management and will help organisations to comply with Section 8 of the King Code 3 Guidelines on Corporate Governance. The course gives a delegate the practical, experienced guidance they need for designing a successful Stakeholder Reputation Management system and includes a dedicated look at communication, engagement and relationship building and reputation enhancement practices. To register, e-mail
When: Monday, November 26, 2012 8:30 AM to Tuesday, November 27, 2012 3:30 PM
Where: Apollo Hotel, Randburg, Johannesburg

158 Bram Fischer Drive Johannesburg 2118
Johannesburg, Gauteng 2118   South Africa

A Definition for the Word “Stakeholder”


Last night I received an e-mail asking me for a modern definition of the word stakeholder.

Immediately my ‘humour’ side kicked in, and I thought of vampires  a-la Edward.

This is a question that I ask at conferences and in my workshops, and inevitably I will get words such as someone or a group that has an interest, or position, or impact on an organisation.

But being a stakeholder is so much more. So this was my response to my client’s request.

My definition : An Organisation derives its reputation from the way it’s performance, actions and behavior is perceived by stakeholders.

A Stakeholder is any group or individual that can affect or is affected by the performance, behavior and actions of an organization.

These perceptions are influenced by the relationship building, communication and engagement practices of the organization.

In the King 3 Code on Corporate Governance specific mention is made of the importance of stakeholder inclusivity (,i.e. that the legitimate interests and expectations of stakeholders are considered when deciding in the best interests of the company), stakeholder identification and determination of expectations and needs, the proactive management of stakeholder relationships, and that management should develop a strategy and formulate policies for the management of relationships with each stakeholder grouping.

Here are some typical questions that leaders should be asking about stakeholder & reputation management processes in their organizations.

  • Who are our stakeholders?
  • What are our stakeholders’ stakes?
  • What opportunities and challenges do stakeholders present?
  • What economic, legal, ethical, and social responsibilities does our organization have towards our various stakeholders?
  • What strategies or actions should we take to best manage stakeholder challenges and opportunities?
  • Do you have a system for managing relationships with stakeholders?
  • How do you measure results? What metrics do you use to assess and gauge stakeholder relationships?
  • In a crisis how quickly can you communicate with your relevant stakeholders?
  • Do you know the various methods to engage with stakeholders and when not to use it?
  • Can you state how much you are spending on each stakeholder group and what your ROI is?
  • Have you developed a set of rules and practices on how best to manage the process of building stakeholder reputation with each stakeholder group?

Another definition says that the term ‘stakeholder management’ refers to the development and implementation of organisational policies and practices (example decision-making) that take into account the goals and concerns of all relevant stakeholders.

Example: If you have employees in wheel-chairs, surely you should have wheelchair ramps. In SA, the Chinese community went to the highest Court to be included as part of Black Economic Empowerment legislation.

The  keywords here are relevant (to the outcome or issue on hand) and the word stake.

The word stake can mean an interest, a legal or economic position (example shareholding or ownership), moral ( I do my best even though I am just a salaried employee), it could mean a public interest stake ( Media – The public has a right to know) or it can even be emotional in nature (example – I cannot relocate, because my forefathers are buried here – symbolising an emotional connection with the land – often seen at Land Claims Court).

Inclusiveness means to ensure the inclusion of the full range of different stakeholders, including marginalised and vulnerable groups.

Relevance –  Include only relevant stakeholders – those who have a significant stake in the process (i.e., not everyone is included).

Remember Gender sensitivity. Both women and men should have equal access within the participatory decision making process (and never forget transsexuals as well…real inclusiveness)

If you want to unpack it further:

· A stakeholder is any group or individual who can affect or is affected by an organisation’s impact or behaviour – I saw this on a Body Shop delivery truck in Singapore. Definition based on Friedman’s work

· Those who are affected by a particular issue, incident or program;

· Those who have information, knowledge, resources or positions which are relevant to the issue;

· Those who have some control over the outcome of the issue.

OK, so what does the above teach us:

– A Stakeholder can be a group or individual (example – a blogger)

– Stakeholder Profiling is contextual and have to be done EVERY TIME, a situation or issue change. Example – I may decide to become active over certain issues but stay dormant on others. THUS stakeholders can change positions.

Read this article for more clarity:

This is what I teach.

How to Project a Positive Corporate Image

Plant 3370498035_8b8ba70861_mPrice Waterhouse Coopers years ago referred in one their booklets that reputation has two main components namely:

  • Perception- How the company is perceived by all stakeholders and;
  • Reality – the truth about a company’s policies, practices, procedures, systems and performance.

Perception is thus closely related to the image that a company projects.

Another way of defining the elements of reputation is that it consists of:

  • Images – what stakeholders think of a company,
  • Identity – what the company say it is, and
  • Personality – what the company is all about.

The alignment of these factors is vital if we want to build, sustain and protect an organisation’s reputation.

Each one of us plays a part in this by representing the company we work for.

The question is whether we project a positive or a negative image? The way we dress, talk, act, and feel expresses this reality of the company to the outside community.

Specifically what we say to others and how we act adds to the images of the organisation. It is therefore important to evaluate what your employees and stakeholders such as the Media are saying about your organisation. If we want to protect and build our company’s reputation, image being just one element, we have to influence this process.

I believe that the way to do that is to reflect on the actions we should use to make our employees become loyal in an era of continual downsizing, restructuring and other changes, and the feelings we should express about our company and what it is accomplishing in the community.

In this process we have to enlist the support of all employees. This process is not the domain of only the Communications department.

Here are a couple of ideas and suggestions that may help:

Conduct research into what stakeholders such as employees are saying about your company.

– Conduct research into the actions you want from employees (Example – All employees will effectively neutralise any negative comments about our company and work to project a positive image), the methods that can be used to measure progress towards projecting a positive company image, and the incentives that might be used to help employees project a positive company image.

– Develop a list of suggested actions* on how to project a positive image that can be handed to each employee as part of an outreach & training program.

– Meet with employees to share this list of suggestions.

– Launch a formal program together with incentives. This has to be a process of selling the benefits to employees, not just telling them what to say, otherwise it will just be received as management propaganda.

* Suggested List:

– Relate positive stories or observations about our company, internally and externally. By telling only the good things we can prevent the spread of negative messages.

– Relate details selectively. Not every interaction with a customer or another person needs to become a “Truth and reconciliation” affair. You don’t have to confess just because some one asked for the details.

– Make a positive remark to neutralise a negative statement about the company. Support your company.

– Do what is important to you and let others know what you value.

Remember that your actions stand for what you are and what stakeholders believe the company is all about. This is closely related to stated company values.

(Or are you just working for the money?)

– Learn about and tell the little known positive things the company is involved in. Make it a point to discover these and to spread the good word about your organisation.

By influencing what employees are saying about an organisation, we can directly affect our reputation in the market and workplace.

Reputation is like a Burning Flame

The reason for the custom header photo – Reputation is like a flame, easily blown out and fickle unless you keep the flame going.

A person’s or Business’s Reputation needs constant attention – building it, sustaining it and protecting it, and when the time comes that things go wrong – effort and attention to restore it.

I am here to assist you.

Drivers of Company Vehicles–What Impact do they have on Reputation?

The manner and way in which a company’s employees use the road can significantly harm the company’s public image and reputation.

The other day I was nearly wiped out by a truck that moved from one lane to another without indicating. Best of all, on the back of the truck was a notice with the words: “How’s my driving? Phone this number!” What a joke!

The way employees drive or ride on the road is a reflection of the company’s image, and highly visible to members of the public, many of whom may be customers of the company.  Road crashes involving company vehicles, especially delivery ones, are also very visible, especially when pictures or company names are reported in the media. Court cases following crashes or prosecutions for driving offences are also reported in the local and national media.

On the positive side, companies which are proud of their road safety performance should include details of their driver management approach, targets and performance in health and safety reports on their websites.

What is a “Reputational Athlete”?


A ‘Reputational Athlete’ is a manager or staff member into whom reputation
protection behavior has been so strongly ingrained that it becomes an automatic reflex.

These are staff members who routinely would ask the following question in meetings and decision making situations – “If we do this, will it harm our Reputation”?

So, how do we make staff members become reputational athletes. This is when the old adage came up in my mind – Repetition is the Mother of Skill.

The Cycle of Learning is perhaps the greatest model in guiding these efforts and is explained in a document called Reputation Risk Management & the Four Stages of Learning (The Conscious Competence Learning Model)

Download it here

This model describes the 4 stages of learning and how an employee is moved from one step to the other. I have adapted it to our field and I think you will find it to be valuable reading.

I have also taken it one step further to include the suggested 5th Step in learning – the so-called “Danger of Complacency” stage. This is the stage where an athlete continues to practise the skill which has become automatic and second
nature, but, over time, allows bad habits to form.

For example, a professional speaker, believing him or herself to be an expert, fails to prepare adequately for a keynote  presentation and drops a clanger.

These are the dangers of thinking you can do something so easily, you become

Complacency can also cause problems if the person doesn’t keep up-
to-date with the skill or profession.

As techniques and approaches move forward, the athlete remains behind using
set methods which have perhaps become stale, out-dated or less relevant to
today. This is personified for me when I first read the brilliant book – Core Performance by Mark Verstegen, in which he puts forward training methods for maximum results in a minimum time period.

It is vital for an athlete to assess and reassess personal competence (Example – So-called personal best in running)(perhaps against a new standard. This new standard could be new thinking on reputation, ethics, governance or corporate responsibility) and step back to the conscious competence stage until mastery is attained once again.

Immersing yourself in Social Media & Online Reputation Management techniques is an example of this type of activity. For instance, I have just enrolled in the New Media University. Yep, I started reading Brian Solis’ book – ENGAGE: The Complete Guide for BRANDS and BUSINESSES to Build, Cultivate, and Measure Success in the New Web.

So, how fit are you as a Reputational Athlete?

Drills and Simulations are NOT a Waste of Time

Last year a blogger, the Time Ninja blog ran a post – 5 Reasons To Say No To The Fire Drill that I felt was irresponsible and ignored the emergency aspect and saving of lives.

The article asked the question – ‘what would happen if you chose to say no to the fire drill? Would the earth stop spinning?  Would you lose your job?’

I responded as follows:

Whilst this is a good article, it completely misses the point of a fire drill.

fire_01Fire Drills are not time wasters. They are a necessity. Fire kills. Large buildings including warehouses have burnt to the ground in less than 15 minutes.

The objective of such a drill is to save lives.

Not only is it a legal safety issue, it is crucial for any organization that wants to protect its reputation. I mean who wants to work or do business with an organization that killed employees and hopefully not, customers as well.

The whole idea with an emergency is to be prepared and to deal with the crisis situation in an orderly and organized manner.

This brings us to a problem situation. If you are an Emergency Manager, do you run an simulation unannounced or a simulation that has been communicated before the time. The one is real, the other contrived.

IMHO it is the best to do the second. People will comply, once they fully understand the reasons WHY, not just the How. I have taken managers with a dubious outlook to the burn unit at a local hospital. Once they visited there, their whole life experience changed.

Equip people to act positively. Build on rocks, not sand.

Ultimately, this goes deeper. To be an Admired Company today, to be a Best employer, deserves attention to detail others ignore. Ultimately it is about caring. A Company that does not prepare for all eventualities will communicate a message that it stakeholders are not important, and as research shows these days, people want to do business with companies they can trust – even from a safety perspective.

Does Reputation Really Matter?

Does Reputation Really Matter?


For the past 15 years I have been speaking and training that it does.

Well it does! My views are now more and more vindicated by on-going international research such as the interesting findings from the Global Corporate Reputation Index study conducted by Burston-Marsteller amongst 6000 companies worldwide and the 2011 Lloyds Risk Index.

Burston- Marsteller’s studies show that Corporate Reputation is underpinned by 2 main drivers namely Performance (Putting your money where your mouth is) and Corporate Citizenship. View the findings on –

(I find it still interesting that this terminology is used as there is a drive worldwide to just call it Corporate Responsibility)

They found that the average age of the top 25 companies had an average age of 87 years in business with the oldest company having been around for a 147 years. This reminded me of the story about Agatha Christie’s famous play – The Mousetrap that ran at London’s West End Theatre for more than 35 years. Over the years, directors and actors were changed but the standards never wavered. Most certainly a lesson for compliance and adherence to standards of commitment.

What stood out for me is that the world’s most reputable brands set high corporate responsibility standards for themselves and their partners and deliver consistently over time.

These are also the companies that invest heavily in corporate responsibility practices and adherences to codes of standards and conduct like ISO and ensure compliance with these codes of governance and best practice.

These companies also view potential Reputation Risk in a serious light and understand how dangerous it can be in a interconnected world. According to the world’s largest reinsurer Lloyds Reputational risk rose to No. 3, up from No. 9 in 2009, according to the 2011 Lloyd’s Risk Index. View the report –

In fact, A 2010 study of the world’s 1,000 largest companies found that 80 percent lose more than a fifth of their value every five-year period because of a major reputational event.

Studies also show that the role of Social Media can no longer be ignored and that these companies have to have a dedicated function to deal with its Digital Reputation and the flow of messages in nano-seconds.

Late last year a new white paper by Deloitte developed in collaboration with RiiЯ Ltd entitled ‘A Risk Intelligent view of reputation – An outside-in perspective” once again highlighted the strategic importance of reputational risk. The report highlighted the fact that Reputational Risk is now regarded globally as a “meta risk, “standing at the forefront of key strategic and operations concerns, right alongside new competition, technology failures, talent issues, and changing regulations.

As executives in the study recognized, reputation, quite simply, can make — or break — a company. Reputation is an important factor across all four major risk areas of the Risk Intelligent Enterprise — strategic, operational, financial, and compliance — particularly of the former two, strategy and operations, because it is a constantly evolving and fully embedded part of why and how the company achieves its objectives.

This catapults reputational risk to what the writers call a meta risk, or a potential menace to fundamental business strategy, and possibly an even greater hazard to organizational survival than a financial restatement or problematical findings in a compliance report.

Read the Report –

Can you define this Meta Risk in 4 different ways as well as describe the mitigation & prevention strategies required to prevent & respond to the risk that has been called the most dangerous and difficult to manage? I can help.

On the 5th – 6th March I will facilitate an intensive 2- day workshop on how to Manage and Mitigate Reputation Risk for those interested – More information available at

Many people have asked me why I help companies to protect themselves against Reputation Risk. Why? Well this quote says it all – “If someone is going down the wrong road, he doesn’t need motivation to speed him up. What he needs is education to turn him around.” – Jim Rohn.

My presentations and trainings are dedicated to create the necessary awareness and know-how to help companies to safeguard their fragile reputations.

Reputation does matter, and not only too companies. It is valid for us all. Read my blog post – why your name is a precious jewel.

Your Name is a Precious Commodity


Your name will arrive at a destination long before you do, so best make sure you have a good name, so the old adage goes.

I was reminded of this last year when I arrived in Beijing to facilitate a Crisis Management & Crisis Communication for Reputation Protection seminar at the Grand Millennium Hotel.

There were a number of delegates that had flown in from places as far as Hong Kong and when I asked the audience what brought them there, the delegates specifically replied. ‘My Reputation’

This just reminded me again of the importance of reputation in marketing & communication. But this subject also worried early authors and philosophers. Here are a few selected quotes worthwhile of thinking about:

“Early impressions are hard to eradicate from the mind. When once wool has been dyed purple, who can restore it to its previous whiteness.”–St. Jerome.

‘Regard your good name as the richest jewel you can possibly be possessed of – for credit is like fire; when once you have kindled it you may easily preserve it, but if you once extinguish it, you will find it an arduous task to rekindle it again. The way to gain a good reputation is to endeavour to be what you desire to appear.” (Socrates – 469 BC – 399 BC)’

Individuals sometimes forget that they themselves have a reputation- just like their organization. Countless studies show that Corporate Reputation is an organization’s biggest asset, yet most dangerous risk in the marketplace.

It is no different for a person. In fact depending on your chosen career, position and stature, it becomes your stock in trade and a lever for success. For consultants and professional service providers reputation is sacrosanct.

It boils down to three crucial elements:

1. Know-how (Your intellectual capital i.e. what you know);

2. A Network of contacts (Social Capital – who you know);

3. Your Reputation (Reputational Capital – who trusts you).

The key for any person who is interested to build their own reputation is to work on these 3 elements as part of their own career development plan.

Many years ago someone shared the concept of the 3 E’s with me. I think it is a Dale Carnegie concept that I am sure you will find valuable in the building of your reputation.

The Three E’s:

E – Earned the right. You can only address a person or a group if you have earned your “stripes” be it through qualifications, experience, and preparation. Doing research, reading and studying your chosen field adds to this. It is about what you know.

E – Be Enthusiastic. Will you buy from a salesman whose product does not generate enthusiasm in himself?.

E – Be Eager to share. Are you eager to share your knowledge, the gem or nugget of wisdom that you have with the person you are talking to or the audience?.

In my own life experience I have found the concept of the 3 E’s incredibly helpful. If you go to my personal profile at and read the recommendations by other experts you will see how the three E’s have manifested themselves in my career and how they added to the 3 key elements of building a reputation.

The implications of these words is that reputation is something that needs constant work just like a gardener attending to his flower beds. Like as in gardening it does not take much for weeds to grow, pests to come and flowers to wilt.

Constant attention and vigilance is needed if you want to maintain and safeguard your reputation. Do you know what drives your reputation? Do you know what can add or subtract from that reputation?

In an area of instant information exchange, where new technologies support new ways of working and communicating, the task of managers is to develop good interpersonal skills and the ability to use new communications technology appropriately.

This use should include an understanding of the misuse and dangers inherent in social media. These days there are companies that for instance specialise in online reputation management — companies that attempt to remove damaging Web content for embarrassed clients.

Just as everyone was once promised 15 minutes of fame, each of us can now expect to have our own “WikiLeaks moment,” the CEO of The New York Times.

Social media expert and former dating columnist Julia Allison likens bad news on the Net like a digital tattoo. It’s like tattoo removal, Allison tells the Times. Although it is possible to erase, it’s expensive and painful and it may always leave some kind of mark.

This implies that companies and individuals need to be more organised and think strategically about the messages that they communicate, advertently or inadvertently. In today’s knowledge economy your reputation and name is your stock-in-trade. Manage it carefully.

Reputation Risk now regarded as a "Meta" Risk

A new white paper by Deloitte developed in collaboration with RiiЯ Ltd entitled ‘A Risk Intelligent view of reputation – An outside-in perspective’ has once again highlighted the strategic importance of reputational risk.

The report highlights the fact that Reputational Risk is now regarded globally as a “meta risk, “standing at the forefront of key strategic and operations concerns, right alongside new competition, technology failures, talent issues, and changing regulations.

As executives in the study recognized, reputation, quite simply, can make — or break — a company. Reputation is an important factor across all four major risk areas of the Risk Intelligent Enterprise — strategic, operational, financial, and compliance — particularly of the former two, strategy and operations, because it is a constantly evolving and fully embedded part of why and how the company achieves its objectives.

This catapults reputational risk to what the writers call a meta risk, or a potential menace to fundamental business strategy, and possibly an even greater hazard to organizational survival than a financial restatement or problematical findings in a compliance report.

In the report, which makes for highly recommended reading; a three-step process of managing reputational risk is recommended including internal discovery, analysis of stakeholders and marketplace threats and opportunities, and proactive management of actions designed to protect and enhance reputation and value.

Download Report –

In this respect, REPUCOMM offers two dedicated training programs dealing with Reputational Risk and Stakeholder Reputation.

These 2 – day training programs are facilitated in-house depending on client needs and requirements or presented in the public environment, as follows:

7 – 8 November: Reputation Risk Management Master Class

23 – 24 November: Stakeholder Reputation Management Master Class

Should you be interested to attend any of these programs, please register online and I will do the necessary or e-mail for a registration form.

The Problem with Reputation Risk

Reputation risk has a tendency to emerge when we expect it the least.

Since everything we do and say can have an impact on the reputation of the organization, careful attention needs to be given to the management of a company’s reputation as an asset and a risk.

Worldwide research shows that many private and public sector organisations regard reputation as their biggest risk. Like all of the intangible assets whose value has escalated in recent years (other examples are talent, knowledge, know – how and intellectual property), reputation has been overlooked by organisations because it is so difficult to comprehend.

It is only when a reputation incident severely damages the credibility of an organisation or one of its brands, or its standing in the eyes of its stakeholders, that the potentially catastrophic consequences of not managing the crisis properly become apparent.

Studies of organisations that have handled crises affecting their reputation badly have identified long term and irreparable damage to share price, market share and brand value.

Many organisations make the mistake of assuming that all that is needed is media training and crisis planning. However, a reputation crisis exposes to public and media scrutiny not only the organisation’s competence at crisis handling, but the values, standards and shortcomings that existed beforehand.

The reputation strategy should, therefore, have two simple objectives – to prevent the causes that could damage your reputation, and to minimise the impact if, despite your best endeavours, a reputation crisis should occur.

It will therefore be in organisation’s interest:

  • To ensure that all managers and staff members understand the nature of the organisation’s reputation and their own individual reputation;
  • That the Board establish a reputation risk management strategy;
  • To develop standards and controls for the action that the reputation asset building and risk management strategy places most importance on;
  • To provide reputation management training, education and communication to obtain the vital support and commitment of all employees and managers;
  • To pay special attention to red flags – analysis and monitoring mechanisms to provide early warning of problems or crises;
  • To implement a process of continuous crisis assessment

Some organisations have attempted part of this process themselves, particularly the first four stages. In my experience, they are severely disadvantaged by being too close to the issues, or by risking avoiding taboo or politically difficult areas, or by not challenging assumptions vigorously or objectively enough.

It is often said that a doctor cannot prescribe medicine, unless he conducts a proper diagnosis. The same holds true for definitions. Unless you define something clearly, the wrong approach to deal with it may be taken.

Here then is a few of the definitions that I unpack for my audiences in my Reputation Risk Management Master Class. Use these to define and customize your approach in preparing your organization to deal with unwanted reputation damage.

Although Reputation Risk often is the consequence of lack of compliance for instance, it is vital for compliance experts to understand their role in the management of this intangible but vital asset.

Just consider these two slightly reframed definitions and your role:

Definition 1:

2495004170_4797c10298_mReputation risk is the risk that potential negative publicity regarding an institution’s business practices could cause a decline in the customer base, costly litigation, or revenue reductions.

Errors or fraud can have serious ramifications on the public perception of a institution.

Management can mitigate reputation risk by having an effective public relations program, by developing and maintaining strong stakeholder relationships, and by enacting adequate internal controls over all aspects of the organization and internal systems so that errors do not happen in the first place.

Definition 2:

image descriptionReputation risk is the current and prospective impact on earnings and capital arising from negative public opinion.

This affects the institution’s ability to establish new relationships or services or continue servicing existing relationships. This risk may expose the institution to litigation, financial loss, or a decline in its customer base. Reputation risk exposure is present throughout the organization and includes the responsibility to exercise an abundance of caution in dealing with its stakeholders such as customers and the community.

Very often the issue of materiality can blow a small thing into a large issue. (Something which Sepp Blatter is struggling with right now).

Exposing managers and compliance experts to how an incident can escalate and create huge impact is vital. Working on these definitions, will close the gap between tangible asset control and the impact of intangibles.

An organisation’s reputation remains its greatest asset and risk, and needs to be managed accordingly. If you would like to know more about Reputation Risk which is mentioned in the King Code 3 on Corporate Governance, read my blog post – or attend the next Reputation Risk Management Master Class – that I will facilitate in July.