Boards around the world now have reputation risk on their agenda as a strategic priority and are recognising the material impacts that it can have on both their capital and liquidity requirements and their company’s legal, regulatory and social licenses to operate. Product recalls can impact all of these things.
The Allianz Risk Barometer 2017 is the latest global risk survey to peg reputation risk among the top 10 global risks for doing business.
According to the Reputation Institute, there are 20 priority reputation risks that every company should monitor. Five of these relate specifically to product recalls. Ranked #5 is the delayed reporting of product defects, #10 is a mandatory product recall, #13 product fraud, #15 repeated product recalls, and #19 unaware utilisation of toxic packaging. In fact, 50% of the risks reported in the packaging industry today mention a reputation impact. Despite this, very few companies today have a cohesive global strategy in place to address enterprise reputation risk management.
In fact, until recently, reputation risk was often discarded by boards and chief executives as an intangible risk – a risk too difficult to measure. Others have addressed it as a risk of risks and suggested that it was always assessed and addressed under their operational risk frameworks. However, that left out critical risks that were reputational risks in nature only and not inter-related to operational risks. With the advent of machine learning, neural networks and Big Data analytics, this is now changing. Reputation risk is now deemed as an independent risk both at the strategic and operational levels.
In Strategic Risk's first interactive online Journal: Managing product recall risk, I join Editor Jessica Reid and Risk Experts, Steve Hather, Miriam Stiel, John Edmond, Allanna Rigby, Manzhi Zheng, Karina Rodríguez Díaz, Vince Shiers and Kevin Leung. In my section: "recalls and reputation risk", I discuss what constitutes a company reputation, how to measure reputation, the impact of strategic communications during a product recall event, and the common mistakes that companies make during a product recall. Note the video insights from my esteemed colleague, reputation and outrage management expert, Dr Peter Sandman.
To read the full online journal, you can find it here: http://journal.strategic-risk-global.com/productrecall/srjournal/
I appreciate that you are reading my post. Here, and on LinkedIn, I write about board related issues - reputation risk, corporate strategy, human capital, technology, corporate governance and risk management trends.
About Leesa Soulodre:
Managing Partner and Chief Reputation Risk Officer of RL Expert Group, an international reputation risk management and strategy consulting practice. Innovation Advisor to the European Commission EU2020 SME ICT Disruption Program. Director of Inspirit IoT, Board Advisor to Belgian PR Software firm, Prezly, Korean Fashion Analytics firm FashionMatch, and the US Sports Analytics firm, Autoscout. Innovation mentor to the University of Illinois Urbana-Champaign Advanced Digital Science Centre, Singapore.
As a serial en/intrapreneur, Leesa has worked for 20 years on the cutting edge of strategy, communications, and technology consulting. She has advised more than 400+ multinationals and their start-ups in 19 sectors across Europe, Asia Pacific and the Americas. She has led companies with turnovers from seed to $14B USD into new markets and has shared the exhilaration of one IPO, numerous exits and the hard knocks of lessons learned.
Connect: Leesa Soulodre.
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