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Reputational Risks

In: Business and Management

Submitted By liuzn501
Words 625
Pages 3
1. Good day ladies and gentlemen, this is leo. I dont think you can recognize my Chinese name, so instead of that, I m gonna to use my American name. today I would like to present managing reputational risks. 2. First, I m gonna to talk about what is reputational risk? Reputational risk - is a type of risk related to the trustworthiness of business. This type of risk can be informational in nature or even financial. Extreme cases may even lead to bankruptcy. Recent examples of companies include: Toyota, Goldman Sachs, Oracle Corporation and BP. Damage to a firm's reputation can result in lost revenue or destruction of shareholder value, even if the company is not found guilty of a crime. 3. Reputational risk can be a matter of corporate trust, but serves also as a tool in crisis prevention. A strong, positive business reputation is an extremely valuable asset for any organization. 4. There are also several reasons for why reputational risks important. 5. There are three determinants of reputational risk. The first one is reputation-reality gap, next is changing beliefs and expectations and the last one is quality of internal coordination. 6. Lets talk about reputation-reality gap first. If the company enjoys an undeservedly high reputation, there is a high risk that the truth could be revealed and substantiated. This revelation could then be very damaging. Clearly, the ability to accurately assess reputation in relation to true character is a critical factor. 7. Next one is changing beliefs and expectations. Shifting expectations and beliefs of stakeholders can widen (or narrow) the reputation gap. In other words, if the company operates in an environment where beliefs about the company and expectations of the company can change quickly, then there is a high risk that the company will find itself out of fit with public expectations of it, leading to a reduced public perception of the company. 8. The last one is quality of internal coordination. Poor coordination of decision-making between business units and functions increases reputational risks. If a company has poor internal coordination there is a risk that the actions or public statements of one part of the company could severely embarrass, and thereby damage the reputation of another part. 9. The more importance, it related to Accounting. Reputational risk is not only an accounting problem, but also the corporation’s reputation and social credibility problems. For reforming the reputational base of accounting system, we need improvement of accounting moral, operation of accounting legal system, and transformation of accounting environment through the economic science and society science combined at the same time. 10. There are 5 steps to managing reputational risks. First, Assess Reputation Measure public perception contextually, objectively, and quantitatively. Second, Evaluate Reality, Objectively examine the company’s ability to meet stakeholders’ performance expectations. Third, Close Gaps, Facilitate effective investor relations and corporate communications programs. 11. Fourth, Monitor Changing Beliefs & Expectations, Survey experts and stakeholders and on a regular basis to reveal emerging trends and determine whether priorities are changing. Supplement surveys with focus groups and in-depth interviews to gain deeper understandings of the cause and potential effects. And last one is Put One Person in Charge, Have the CEO appoint one person to oversee reputational risks and periodically communicate findings to top management and the board. 12. There are several ways to develop a reputation. Such as Clear strategies and resources, learning from other’s mistakes, listening to customers’ opinions. 13. Also, there are some other methods. Just look at it briefly. 14. Last, I would like to share some words from Ben. “It takes many good deeds to build a good reputation, and only one bad to lose it. “ That is my presentation. Thank you for listening.

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