9 Musts to Deliver an Effective Reputation Risk Management Policy
Warren Buffet, Chairman of Berkshire Hathaway once told his staff in an internal memo “Our reputation is our only asset – without it we are worthless.” Reputation, whether personal or corporate, is built on trust and belief. In our ever-changing global climate, it is increasingly important that a strong reputation is actively managed and consistently reflected upon. In adverse conditions, a reputation will not survive unless it has been well protected, invested in, and cultivated over time. Organizations should invest in a reputation risk management policy that ensures their reputation is positive and protected.
When I was first indicted and ultimately pled guilty to a federal crime in 2014, I felt strongly that it was my responsibility to be transparent and vulnerable to every person in my life. At the time, it did not occur to me that I was executing my own reputation risk management policy. Rather, I was doing what I believed was the right thing to do. Methodically, I made a spreadsheet of every person dating back to my early childhood days with whom I had a relationship based on real life experiences, stories, and moments. Inherently, I believed that I needed to personally tell each person my story, take ownership for what I had done, and seek out help and support. One by one, I began to call each person and detail the seven year story from the moment that it started through the visit by the FBI to my current decision to plead guilty. Truthfully, I could only handle about 5-6 calls a day, since I was scared, emotional, and still very uncertain about the outcome and my future. Over the span of four months, I made about three hundred calls to family, friends, mentors and sponsors. At the end of each call, I would ask each person to support me. Ultimately, I received almost 200 letters of support to the judge
During this time, I learned the incredible value of being authentic and taking responsibility for my actions. I began to recognize that I had invested in my relationships over decades genuinely and selflessly, or at least I strived to do so. I remember one of the mom’s at my children’s school calling me one day to tell me that she had so much respect for the fact that I was being open and honest about what I was going through. I had called her a few months earlier to tell her my story and ask for her help. She had written me a letter peppered with stories about me and my children and our positive influence on her kids’ lives. She now called to tell me that my transparency allowed her to have valuable conversations with her boys about recognizing that perfection was not necessary, not to pass judgment on others who have done wrong, and more valuable lessons. At the time, I felt incredibly touched, and realized that my reputation had been rooted in trust with each of my contacts and, thus, allowed me to have the difficult conversation with each of my relationships. Each person I called had unconditional faith and belief in me and, that at my core, I was a good person with values that they respected and would continue to support.
I have learned through my experience, that in order to deliver a reputation risk management policy, a company’s executives must do the following:
Reputation Risk Management Policy: Executives’ To Do List
- A company’s reputation is a valuable, strategic asset and must be actively managed and led by C-Suite and at the Board level
- Create a corporate culture that inherently is focused on integrity and directly connected to the brand/reputation
- Be transparent and treat stakeholders intelligently and respectfully
- Do not wait till a crisis erupts, but rather diligently create a reputation risk strategy that is rooted and supported throughout the company
- Create a committee that includes all necessary perspectives to meet regularly
- Implement a well-thought out process that defines ownership of each key area in the process
- Make sure an escalation protocol is included in your policy, including a direct route to executive management
- Continue to evaluate risk factors to recalibrate reputation risk management policy within the organization’s culture
- Ensure that your reputation risk strategy requires an honest ownership of all facts and then sincerely leverage off that vulnerability with your relationships
A corporation’s reputation plays to the unique needs, expectations, and objectives of each consumer, shareholder, client, employee, and to the beliefs of each citizen. A reputation describes the emotional, logical, and rational connections with a company. For these reasons, management’s success or failure is driven by the perception of a corporation’s brand. C-Suite, Board executives, and management must increasingly prioritize the corporation’s reputation risk strategy and the diversity of risks that can damage it. As Ralph Larson, former CEO of Johnson & Johnson once said “Reputations reflect behavior you exhibit day in and day out through a hundred small things. The way you manage your reputation is by always thinking and trying to do the right thing every day.”
Does your organization need guidance in creating a reputation risk management policy? Contact Rashmi to see how she can help your organization!
Rashmi Airan‘s mission is to help organizations create cultures focused on integrity, authenticity, and accountability by connecting these efforts to human performance, behavioral ethics and emotional intelligence. Rashmi is a keynote speaker and consultant specializing in organizational culture, reputational risk, and human performance. Contact Rashmi to see how she can help your organization.