�� �Dؿ@CA�A�*��P�c��nQ��@�� T�H�00(���YO )3�5+!� @�L Reputation Risk Management, Ethics, and Values: An International Debate 3 impressions among observers about what a company is, what a company does, and what a company stands for. Risk Reputation 2 SAGE Open approach to measure and manage reputation risk to be imple-mented in banks in practice. 153 0 obj A company finds an error in its accounting and need to restate its results for the past 2 … 321 0 obj Who Suite. Risk Reputation NYC-OWY01801-028 <> Identification of reputational risk. 312 0 obj 2. (2017, p2) when investigating the effects of misreporting on borrower reputation2. It is important that risks are categorised in a way that is relevant to the needs of the organisation. 164 0 obj Adobe InDesign CC (Windows) 2014-07-15T11:35:05.000-04:00 314 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/Properties<>/XObject<>>>/Rotate 0/Tabs/W/Thumb 304 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> default ���O������x�7Y� DSa�����a{�m9�1�/��`������ ,t=I�/�O��6��q h�bbd``b`.�@� �zH�X�X� � �h � ��@���0��2�$�>�X�@�@Lm@B�H�71012f Y�D�d� ��< Reputational risk, often called reputation risk, is the potential loss to financial capital, social capital and/or market share resulting from damage to a firm's reputation. Is Reputation a Risk? 315 0 obj ޫ?.��X��;F=�r�Ŕ?�]E�1��NSU�. converted Conclusion 3. In fact, reputational challenges tend to be fluid and fickle. How do we manage reputational risk? 504 0 obj <>stream reputational risk of furloughing staff Furlough furore after Premier League ignores aim of protecting jobs “Selfish in a crisis,” FT’ Lex column on Tesco paying its dividend. "NYC-OWY01801-028; Risk Reputation NYC-OWY01801-028; NYC-OWY01801-028"; Risk Reputation NYC-OWY01801-028; NYC-OWY01801-028 This is often measured in lost revenue, increased operating, capital or regulatory costs, or destruction of shareholder value. endobj Reputational risk is not considered in most risk-management frameworks to be a primary risk; rather, it is an outcome, or a consequential risk, that arises from other types of risk. ! LITIGATIONS AND REPUTATIONAL RISK. <>stream Measuring the Impact of Reputational Risks 4. endobj As Warren Buffettput it, “It takes 20 years t… “Reputational risk” is the risk of damage to a bank’s reputation as a result of any reputational event, arising from negative publicity about its business practices, conduct or financial condition. endstream %%EOF <> NYC-OWY01801-028; Risk Reputation NYC-OWY01801-028; NYC-OWY01801-028 <> �,�4��-��N����#��/�p��ȡ�'��6���~0>�ekd��@�hd�)����CC�ڦ!���4�][���zj��$#/�sH�W�ּ��E@�����o0�����t������90�m�m��Ի�F��M��1v#�q�\Y��X�3� � ��}=�r���>/@��e0�``v�L!,΁6�Əp�,���s�X0�kݾ7KP?��y����3C�M���PS�TXݓ�.`:�q�M�+��QR�e.�%�{��Q�g�q� "�����ַ���,\�+�ta�*6����?$�;��a0#�f����Nl͒>���V -T��(*imG��-�@�T�c�@���a��8Kr�\��}���G�7�_' >��#���:i���Fa���%���7 ��8��m����m@6�XnS\���qc���UР��ȇ���jD�V�?�c�@*٣n�F4�x��'`���~Ώx� Y�yۮt���U�� ���R��M,l�1�R�pdhm�>�p�I�]�[��H1��VVvi��&�C됓5�ٌ��;2���#%1{5���*!���P"��r�pdtx�b0y���q����d�^�8�\c���r�voٲř�t@�ɾ�CY��L���>� Rl�%R�a~z�bgV�3���ܜJ�@����'�����3�e ����Ђ�X�Bb��ؖ�x��b\j�K�``.� �_�ݐ��3�O��*'�B� Ȑ�yd��ҥ��{ʭJ�%��v�5�WSk]�mt:����8������˩D�ӱ���&G�����l �M����rFT#�&�Ƃbu� ����y��E�� ?��O��mJG�n�'�����"$���'H�Q��>���!M�j�!8*v�;u��\x�=���Nhۊc��^X6�k��DsY��v�2�88� GC����]fP��}�E2˔d� adobe:docid:indd:5e8f0d10-c089-11dd-8e1d-d1417dac0bfb However, financial firms are unavoidably subject to reputational risk as a result of the announcements related to these operational risk events, which ultimately encompass elements of ‘poor internal controls’ as posited by Chava et al. reputation risk is as monolithic as reputation itself. endobj Reputational risk is defined as the current or prospective risk to earnings arising from the adverse perception of the image of the Organisation by patients, partner organisations and individuals, the local community or regulators. Also, the value of reputation gets higher as the ability to recover from reputational pitfalls strengths, but it decreases in a framework with high uncertainty and risk. 316 0 obj 320 0 obj / Nonetheless, the term “reputational risk ” is used in this discussion paper to simply describe the risk of damage to reputation. The questionnaire has been completed by 18 institutions out of the 23 firms that were asked to participate. It is the first study which develops a holistic approach to measure and manage reputation risk to be implemented in banks in practice. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/W/Thumb 303 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> Reputational Risk Financing 7. <>>>/Metadata 448 0 R/OpenAction 321 0 R/Outlines 285 0 R/PageLabels 310 0 R/PageLayout/SinglePage/Pages 312 0 R/Type/Catalog/ViewerPreferences<>>> false adobe:docid:indd:5e8f0d10-c089-11dd-8e1d-d1417dac0bfb 165 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/W/Thumb 302 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> application/pdf <> Adobe PDF Library 10.0.1 The GRRC, which was established by the Group Chief Risk Officer to help him discharge his reputational risk oversight accountabilities, comprises the Group Chief Risk Officer, the Director of Regulatory Affairs, the NWH Risk … endobj Reputational risk is governed by the Reputational Risk Framework, which was established to provide consistent standards for the identification, assessment and management of reputational risk issues. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/XObject<>>>/Rotate 0/Tabs/W/Thumb 308 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> reputation risk management can, in the future, help prevent negative spillover effects from banks which face difficulties from the society or the taxpayers. ԏ*�����wF�3,�VU.��N5�J�oV�P�6��K]-Y��M� �È{?������J���%�DBtN]��{��ZX=4�q`�SX�2?Ei�M�+yC7z� .� �P�QR�Dh6j?�>nX�"㵛�[��J�%��@���ʭi �T�����I�����b(�����vt'�=�� ��+*=�9��5E$�ۃZ��&���w�q��J�J�]��[)�f���@��b����qf������.�f,�!V�g��4&�Z놠;ù�c9@�/�n >tm'�mE1��7 a�Q���:��]��>�>M�u�FE�NC�T�pB'�C@��œJzC��?������(���8#���D����v[yd�L�!���P� /6(�����_r=2 � ���R֒����sg��=�r|P�� What •Reputation risk is a top strategic business risk, being a key business challenge. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/W/Thumb 305 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> <> • It can be caused by an individual or by the behaviour of a company as a whole. VOl �/���}����̑��G\�)���8Yq�mf�p�(�"��DR��n��¢#C��pT���"�� endobj Reputation risk becomes subject to crisis management when and if a crisis emerges with reputational implications in which having a well-developed and ready to deploy crisis management plan and team is essential to successful reputation risk management. MANAGING RISK Managing Reputational Risks Lapses in business ethics can lead to enterprise costs, damaged relationships with key stakeholders, and lost opportunities that significantly harm financial perfor- mance.Conversely, an enterprise’s reputation for ethical conduct can be a crucial asset for achieving its strategic and financial objectives. Linking Strategy, Tactics and Operations 5. endobj 2016-01-19T17:46:01.512-05:00 A reputation risk that is not properly managed can quickly escalate into a major strategic crisis. Keywords bank management, risk management, reputation, reputational risks. xmp.iid:8d2e4336-5584-3f40-9be2-8881d8a38912 2. The purpose of this document is to elaborate an effective approach of managing reputational risks in banks. 448 0 obj This latter survey also aimed to illustrate the ‘current’ state and planned activities of reputational risk management, but with only leading German financial institutions as its foundation. Adobe InDesign CC (Windows) h�b```���\q" ��ea�h8����0�S�6o�8s7�̃�gT�w3ht�+�GV��H J�J.�i�T(�����V�)I>�[��R�DO ��X�~T;xJS-*�`[F�{{�rEsEk�������l ڏ�f����[,�b)�ӗ/����`������-� �� endobj endstream endobj startxref Of note, the top three reputational risk concerns of 300 respondents to a Deloitte/Forbes Insights survey were issues arising from ethics and integrity such as fraud, bribery and corruption; security risks (both physical and cyber); and product and service risks. xmp.id:9a73bf78-8dd1-3e40-804b-e2080eff0e72 9a7c3adff4cf62ab8dd381b30ebbb8e7006bbe2a �o3�`fa ���I6�HP{'� � <> and reputational risk. hޔ��R�8����A?an�Z�$�3fB��� m9�F8r�ñ][�Ч���3� ���������������J)JA����s�aQ�2&!�s�# PRBT�Oh{���(&? Hence the importance of reputational risks management as a measure to maintain the delicate loyalty of stakeholders. ��*{���)�M�6.pa?O��Χ�z>�d9A(�㑋�]��u���9���rp�ڨX%��I}s��kͩ�Ԅ��Yƙ�ш�2��O�sQ�e{=B?xpvޮ��� endobj %PDF-1.7 %���� Risk Reputation NYC-OWY01801-028 {�V��w�sp���+�ʗ�4{�2,���he������y��in}!q��j�>��0�4:��.�x-�n�.j+�!�O���H}IW���귇r�����@} xmp.did:8069B7E27ACCE3118073F2CC38F36180 Reputational risk is not a new concept, but the efforts to manage it as a self-standing type of risk, rather than within an operational risk framework, are quite recent. False endobj 285 0 obj endobj ��#Z�q�׽�&"\��f�Z�R�E��1�1��R4-���6�k�9��Uk�s��U�9nD��?���ݙ �a��N�j�ͬZ����ߧ�H}�hx��*�E�+��{�$���xv��`��h9ϰ7 Uo��LD^ 0�D����ލ��`m@y��-Iq�,&~B��g6�A�i�-����0Ag�BAʳ���� �Z��� ��9O����(��$�h䒉�jC�T��̈�g�1����°�'x*d���Fc�j���&��"V&V, NYC-OWY01801-028; Risk Reputation NYC-OWY01801-028; NYC-OWY01801-028. <> endobj 310 0 obj Reputational risk is the risk of failure to meet stakeholder expectations as a result of any event, behaviour, action or inaction, either by HSBC itself, our employees or those with whom we are associated, that may cause stakeholders to form a negative view of the Group. reputational risk, particularly within the banking sector and among its customers. • Reputational damage can be caused by many factors such as dishonesty, incompetence, activities that do unnecessary harm to the environment or unethical behaviour. endobj 2014-07-15T11:34:55.000-04:00 •Responsibility for reputation risk resides with the highest levels of the organization – board and C-How An ethics and reputational risk assessment is a systematic way to identify the ethics and integrity risks that could threaten the Global Fund’s ability to fulfill its mission. KPMG reputational risk study which was conducted and published in 2012. Reputational risk is governed by the Reputational Risk Framework (the Framework), which was established to provide consistent standards for the identification, assessment, and management of reputational risk issues. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/XObject<>>>/Rotate 0/Tabs/W/Thumb 307 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> uuid:27f4cbbe-8da3-4571-9301-01cb174c782d Potential crises can take a range of pathways, giving rise to unanticipated consequences. endobj A reputational crisis can deal a devastating blow to customer confidence. 2014-07-15T11:35:05.000-04:00 And the acceleration and amplification of bad news through social media demands an urgent and coordinated response because reputational damage can be inflicted faster than ever before. By definition, reputational risk refers to the potential for negative publicity, public perception or uncontrollable events to have an adverse impact on a company’s reputation, thereby affecting its revenue. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/W/Thumb 306 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> 149 0 obj ����H� �n_Q6����D�D,�=Y*=�"{3Y���{P�.`c�ܶn�];4a��iM߅���7;�{n ̞}��r����Q�ΐ��nfu��4.f7�Y��|:v��y�餗O3E5�"Q�\�U�^W�4E_�@���-�e�����.�*\뼗�z5�6��0�^��R��r"[���hqg�#� endobj 313 0 obj The scholarship on reputational risk management in banks is still limited in size. 473 0 obj <> endobj @UOh�Oh��eC�x�}���q�y��/k�2�_2�%���ܧ��w� ]Q�se�&��0�j)���&@0w(��0�l�a40�k9$�(�E�7C5�� ^��q$�d�T�Kj%�h0�B��Z=�u����(� Successful reputational risk management is determined by effective cooperation and communication between senior management who determines the target reputation and the overall risk strategy, the centralized risk management functions who undertakes the methodologies and processes for any risk management framework among which, is the reputational risk, the corporate … from application/x-indesign to application/pdf Reputational Risk Protecting what – matters most. H��Wˎ����W����z_-a}2��>����]c���YE�I�40�*���gd槟�����?�����/���/���?�����5/����_�����>��oa����O?��/�y�+�}��o�o8V�s�e����ۅ��X�?��X��Zn��7{��[\����[V\R��ː#ŵ�z� YVm�/���r��rXK�����7-���*.ڞ�y ���hY��~��ަ�{��!Qȋ�ZkJ���5������X֐��DN������|�����^�p��E��B88a��Ɔ�-n��Ǐ���YJ�>s��o�������߷�բ!�j�H��+�Tx z��)�o���/e�lz'��O�c~dx�樫�X�;e-9.�i����Z�Ύ��� �/k ��$u��Z���S��B��J��x���c��fܵ�)���f�{�+u��]p1�q���0�u� ;���O�h��P�S%�0�?�����/�]�:�Z��}!pb��XUQ��[�� R�d9�Uz5��G���5A7U�A��;�L�V �3���v�Y�6#��n'c�V+. Excessive risk taking, inefficient risk management practises, and increased reputational risks may have a negative impact on banks’ abilities to attract deposits, investments and … reputational risk is the risk that people will have a negative opinion of an organisation and share that opinion with other people. �1�B��T����+?� Threats can spring from many different sources (see Exhibit 1), and stakeholder tolerances can fluctuate. Aligning Reputational Risk With Strategic Risk. Reputational Risk Committees are established in customer facing businesses with the Group Reputational Risk Committee (GRRC) considering the most material cases. 2014-07-24T08:43:05.000-04:00 NYC-OWY01801-028 160 0 obj It noted (in paragraph 48): “Reputational risk can lead to the provision of implicit support, which may give rise to credit, liquidity, market and legal risk – all of which can have a negative impact on a bank’s earnings, liquidity and capital position. endobj Since reputational risk carries such a high level of concern for board directors and senior-level executives, it makes sense that boards should give reputational risk a high priority. endobj Unlike reputation risk management, crisis management is something that happens suddenly and in the short term. �vґ�� FROM CORPORATE MINDSET TO SOCIAL MINDSET Since it is a shared social reputation risk losses (over 100% of the announced loss), while execution and process errors tended to have only minor reputational impacts. Risk Reputation NYC-OWY01801-028 Accounting. MEASURING THE IMPACT OF LEGAL PROCEEDINGS ON THE REPUTATION OF COMPANIES to highlight several keys for the management of corporate reputation that might and should be applied as regards the reputational management of the litigation. 162 0 obj 129 0 obj endobj <> Pillar 2 guidance on reputational risk and implicit support. ��"rb�UD{X�����W����4H�. • The initial reputation/brand of a firm was an important factor driving the loss, with the reputation risk losses more than doubling when an event happens to a firm with a strong brand. Reputational risk strikes without warning and shifts your corporate landscape. 6. 123 0 obj false A concise and and easy to follow introduction to financial risk management This basic survey text offers an accessible introduction to financial risk management, covered in its major components: credit, market, operational, liquidity, legal, and reputational, along with user-friendly processes and tools to conduct your own risk assessments and risk alignments. 493 0 obj <>/Filter/FlateDecode/ID[<77C77F93D5E912439E47645615D5A840>]/Index[473 32]/Info 472 0 R/Length 94/Prev 1224122/Root 474 0 R/Size 505/Type/XRef/W[1 2 1]>>stream Adobe PDF Library 10.0.1 Reputational risk in our view is a risk that ultimately manifests in multiple risks such as liquidity and funding risk, asset growth and business risk, ability to issue capital instruments, etc. proof:pdf <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/Properties<>/XObject<>>>/Rotate 0/Tabs/W/Thumb 309 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> ���߬��]�s�R8�����ذf " u���d�D��& 㰄��(Ko{um��/���$��Q�N^:��]XƁ#5��o�*Ь_���첼]� 125 0 obj Reputational risk is a hidden danger that can pose a threat to the survival of the biggest and best-run companies. ��2�x�¸��]y��&fV�p? Thinking people will differ in what they define as “ethical”. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/XObject<>>>/Rotate 0/Tabs/W/Thumb 301 0 R/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> <>stream 0 Without this bond of respect, employees will leave their positions, investors will look for other projects to finance and customers will opt for competition. ow:practice/risk-management Trust is the foundation on which companies build their relationships with all stakeholders, from company workers to consumers. 24 endobj 2014-07-15T11:34:55.000-04:00 “Ethics” refers to the application of moral judgment to the challenges of running the Global Fund. %PDF-1.6 %���� endstream endobj 474 0 obj <>/Metadata 52 0 R/Names 495 0 R/Pages 469 0 R/StructTreeRoot 103 0 R/Type/Catalog/ViewerPreferences<>>> endobj 475 0 obj <>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 4/TrimBox[0.0 0.0 595.276 792.0]/Type/Page>> endobj 476 0 obj <>stream 1205647 138 0 obj endobj Into a major strategic crisis to participate GRRC ) considering the most material cases still... 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