Article - Managing Reputational Risk

Managing Reputational Risk

Financial loss can often be forecasted and mitigated, but if a business experiences an unfortunate event that negatively affects its reputation, the effects can be devastating and even lead to closure.

Even if you do everything in your power to maintain your company’s reputation, at some point, a damaging mistake will occur. Therefore, you need to plan ahead and learn how best to manage your reputational risk.

There are many things that you can do to try to manage reputational risk. Here are some suggestions for coming up with your own plan:

  • Understand the risk—Damage to your reputation can not only result in negative public perception, but can also anger and disappoint stakeholders in your business.
  • Build yourself up—Your company should take the time to build a positive relationship with the general public and your peers. Gradually build up your reputation in order to provide a cushion should an issue arise in the future.
  • Set realistic expectations—Be transparent with clients, employees and stakeholders, and work with them to create realistic expectations. Setting the bar too high and falling short will result in your company being known for not delivering on promises.
  • Control processes—Establish clear and standardized processes and procedures to reduce the chance of an event that harms your reputation. If something does happen, this can also help reduce damage to your reputation by allowing you to explain the cautionary measures in place and how you plan to improve them in the future.
  • Be ready—Have contingency plans in place before something happens so that if a crisis does occur, your company will be ready to respond quickly and properly. A situation involving your reputation can quickly spiral out of control, so every second counts.

There’s no shortage of responsibilities or risks that come with being a business owner, so make sure that the product of all your hard work and long hours is protected. Contact us today to learn more about keeping your business safe.

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