• Reputational risk management continues to demand attention

    The current digital transformation businesses across Australia are undertaking is beginning to affect other important aspects of the way they operate. 

    In many cases, significant investment in emerging IT technologies is underscored by a focus on cybersecurity. While this used to be little more than a tech issue, the value that data holds for the world's businesses now means that any digital security breaches can create concerns for reputational risk management.

    A survey conducted by insurance brokerage Marsh and Disaster Recovery Institute International detailed the 10 ways these trends are converging, finding that organisations have different ways of dealing with the associated reputational risk. 

    Cybersecurity influences risk management

    One of the key findings in the survey, which canvassed almost 200 C-Suite executives, is that most businesses feel there is a tangible link between cybersecurity breaches and reputation management. This often to due the fact the organisations possess a significant amount of personal data relating to their clients or customers, which can result in public scandals if it is improperly handled or distributed. 

    In fact, the survey revealed incidents where sensitive date is breached as the most significant concern for risk management, with 79 per cent of respondents citing this issue. 

    The survey did confirm that CEOs are reacting to these issues, with 28 per cent stating they had insurance plans in place for cybersecurity breaches. President of Marsh's International Division, David Batchelor, believes there is significant value in being prepared for these events. 

    "Additionally, having a well thought out crisis management plan is a critical element in protecting an organisation's reputation," he explained. 

    A similar survey from Gartner also confirmed that employees will be the key to managing cybersecurity and its effect on a business, not just technology solutions. 

    Reputational risk aligns with business objectives

    Ernst & Young (EY) investigated further ways reputational risk links to other aspects of a business, confirming that some element of risk is essential in the daily running of an organisation. 

    The firm promotes the act of aligning all preventative risk measures – reputational or otherwise – throughout a company, ensuring all departments, teams and employees are familiar with the processes. 

    However, EY noted that organisations are at least making progress in these areas, finding that 97 per cent of survey respondents reported they had made concerted efforts to link risk management concerns with business objectives. 

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