Nir Kossovsky, CEO of Steel City Re

“With a record number of CEOs losing their jobs last year, and the number of reputation-based lawsuits over board-level oversight surging, corporate leaders clearly need a preemptive reputational risk management strategy.”

PITTSBURGH (PRWEB)
October 02, 2019

Although the reputations of companies and their leaders are more vulnerable than ever, there are seven practical steps they can take to forge reputation resilience, reports a white paper https://steelcityre.com/wp-content/uploads/2019/10/Pub-0036-Reputation-Risk-Management-Checklist-20191001.pdf from Steel City Re, which provides insurances and reputation risk governance advice.

“With a record number of CEOs losing their jobs last year, and the number of reputation-based lawsuits over board-level oversight surging, corporate leaders clearly need a preemptive reputational risk management strategy,” says Steel City Re CEO Nir Kossovsky.

“Ninety percent of the S&P 500 refer to reputation in their SEC filings as a material risk – but most never describe their strategy for mitigating it,” says Kossovsky. And yet, says Kossovsky, most corporate leaders do not fully appreciate that reputation risk is actually the peril of angry disappointed stakeholders. It is not a marketing problem. “When boards disclose reputation as a material risk without truly understanding it or appropriately mitigating it as a governance and operational problem, they are putting themselves and their companies in even greater peril.”

Milestones on the road to corporate reputational resilience lay in a seven-point checklist, cited in Steel City Re’s latest white paper:

1.    The board of directors comprehends the true nature of reputational risk – economic damage and go-forward losses resulting from the behaviors of angry and disappointed stakeholders, as opposed to merely negative media coverage.

2.    A board committee oversees the corporation’s enterprise-wide policies, practices and procedures that mitigate and manage reputational risk.

3.    Senior management sets appropriate stakeholder expectations by bridging risk management and marketing silos—so that aspirational messaging doesn’t outpace actual performance.

4.    Treasury understands the peril is to cash flows rather than balance sheet and is prepared to fund reputation losses with insurance captives or risk transfer solutions.

5.    Risk management continually assesses stakeholder expectations, taking into consideration rapidly changing cultural and political events, and has a clear understanding of the full spectrum of operational and financial strategic options to manage and mitigate potential losses from those perils.

6.    The company deploys preemptive, simple, easy to understand expressive risk management strategies such as warranties and insurances to inform and substantiate the marketing department’s messaging. Communications activities support risk management with signals of governance integrity.

7.    Key stakeholders appreciate and value the company’s enterprise-wide mitigation and governance efforts.

Steel City Re

Steel City Re, backed by Tokio Marine Kiln, provides advisory services and reputation insurances. The company pioneered synthetic measures of reputational value that inform its solutions. These measures are also used by Wall Street for equities arbitrage strategies, Lloyd’s and other insurers for both parametric risk transfer and insurance captive compliance.

Through its advisory services, it deploys state-of-the-art reputation risk governance and enterprise risk management solutions, and models potential losses. Its risk financing and risk transfer services comprise pricing and underwriting support for insurance captives and risk transfer

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