Patty P. Tehrani, Esq., is an experienced compliance attorney and has nearly 20 years’ experience in compliance including senior in-house roles at top financial institutions, authoring articles and blogs, and compliance consulting engagements. She has created a series of tools, guides, and reference materials on governance, risk, and compliance functions—including guidance to help establish reputational risk frameworks—available in the compliance-focused practical guidance on Bloomberg Law’s Corporate Practice Center.
Does your organization know the importance of its reputation? Warren Buffett (Chairman and CEO, Berkshire Hathaway) said years ago: “It takes 20 years to build a reputation and five minutes to ruin it.” Recent scandals confirm that even hard-earned reputations can be vulnerable via social media and ongoing news coverage. The impact is faster and more enduring, leaving a once impeccable reputation tainted or irrevocably damaged.
Most organizations understand that their reputation has value and know the benefits reaped from a good one but struggle with how best to protect it. The enduring trust of customers, investors, suppliers, regulators, employees, and other stakeholders boosts the organization’s confidence and its bottom line, but a weak or damaged reputation can lead to shareholder dissatisfaction and loss of revenue.
This article focuses on using a dedicated framework or program to anticipate reputational risk and provide defined measures to prevent, detect, and manage them. If designed/implemented properly, the program would align organizational values with what it does (or does not do) in response to a crisis.