Corporate reputation risk on the rise
Businesses are finding reputation harder to manage than ever before, but are under-investing in protecting this primary asset, according to research undertaken by SenateSHJ.
Ninety six per cent of leaders surveyed see reputation as a key component of their success, while more than 50 per cent believe it is now more difficult to manage than other forms of risk, and more important to manage than it was three years ago.
The study, Reputation Reality: Trans-Tasman Perspectives on Reputation and Risk, highlighted a range of risk management strategies that organisations are failing to invest in.
Less than half of New Zealand respondents have a dedicated line item in their budget for reputation management, with slightly more in Australia. A similar percentage are planning to invest in crisis simulation training – one of the most effective ways to prepare for a crisis. This means around half have no plans to test their ability to react well in a crisis.
This underinvestment leaves them exposed to identified risks such as dissatisfied customers, cyber-security threats and safety breaches, which New Zealand respondents identify as posing the biggest threats to their business success.
Australian respondents identified unhappy customers, regulatory changes and product failures as the biggest risks to their corporate reputations.
While eight in ten respondents in New Zealand said their organisation is proactive in protecting its reputation, only a quarter have a budget line item for reputation management.
Conversely, nine out of ten respondents in Australia said their organisation is proactive in protecting its reputation, with half of those surveyed saying that have a budget line for reputation management.
The survey also asked respondents to provide examples of organisations they believed managed their reputation well under pressure. Air New Zealand received the most accolades in New Zealand for its handling of the A320 Airbus crash during a test flight in France. In Australia, Qantas was identified as a leader in reputation management due to its honest and straightforward communication with the media and general public.
For the full reports Australian and New Zealand reports as well as media releases, please click the related links on the right.
To watch a video of the high-level findings, please click here