Browse Definitions :
Definition

reputation risk

Contributor(s): Ivy Wigmore

Reputation risk is the threat to the profitability or sustainability of a business or other entity that is caused by unfavorable public perception of the organization or its products or services. Reputation risk management is a component of reputation management, which seeks to shape the public perception of an organization or a brand.

Business sustainability relies on the careful management and coordination of environmental, social and financial demands and concerns to ensure responsible, ethical and ongoing success. Anything that impinges upon any of those elements can create reputation risk, especially in these days of social media when experiences and opinions are shared swiftly and widely online.

Reputation risk is strongly correlated with conduct risk, which is threat that results directly from an organization’s actions. Although reputation risk can also result from issues that are beyond the control of the organization, the most important element of reputation management is ensuring scrupulous business practices.

To some extent, reputation risk is an expansion of how an enterprise thinks about its problems and failures, whether actual or potential. Traditionally, for example, the effects of a product recall might be evaluated in terms of the expected profit that had been lost or the cost of repairs or replacements. However, that failure is likely to have broader effects, such as a loss of confidence in the company's products that impacts future sales. Similarly, the effects of a data breach are likely to be far-reaching.

This was last updated in May 2017

Continue Reading About reputation risk

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

SearchSecurity

  • cybersecurity

    Cybersecurity is the protection of internet-connected systems, including hardware, software and data, from cyberattacks.

  • asymmetric cryptography (public key cryptography)

    Asymmetric cryptography, also called public key cryptography, uses a pair of numerical keys that are mathematically related to ...

  • digital signature

    A digital signature is a mathematical technique used to validate the authenticity and integrity of a message, software or digital...

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

SearchStorage

  • hard disk drive (HDD)

    A computer hard disk drive (HDD) is a non-volatile memory hardware device that controls the positioning, reading and writing of ...

  • byte

    In most computer systems, a byte is a unit of data that is eight binary digits long. Bytes are often used to represent a ...

  • network-attached storage (NAS)

    Network-attached storage (NAS) is dedicated file storage that enables multiple users and heterogeneous client devices to retrieve...

Close