Business leaders and corporate affairs professionals are tasked with managing a range of concerns that can affect the performance of an organisation.
However, while tangible risks such as financial performance and regulatory changes provide clear feedback for businesses to manage, the effect of others such as reputation and brand value can be difficult to quantify.
What most leaders are aware of is the potential for reputational damage to create lasting negative effects on a company. Generally, these events create a negative perception among the public, which can have a flow-on effect on other aspects of a business, depending on how people react.
Insurance provider Allianz investigated where these reputational concerns rank among the other challenges modern companies are forced to manage. According to the firm, loss of reputation or brand value ranked sixth overall internationally in its survey of corporate insurance professionals.
According to Allianz, this is where reputational risk management ranked last time the survey was conducted. In this year's edition, respondents were more concerned by the risk inherent to their supply chain and the potential for natural disasters to impact their operational stability.
When the results are broken down geographically, however, the results reveal that Australian businesses appear to be more attuned to the effects of reputation damage than their international counterparts.
In Australia, business challenges are defined by the potential loss of reputation and talent shortages, a unique perspective in comparison to global trends.
A September 1 interview with the Wall Street Journal saw Deloitte chief risk officer Chuck Saia discussed the many ways in which businesses can mitigate the negative effects of reputation damage.
Mr Saia believes platforms that allow organisations to communicate directly with the general public, such as social media, allow them to react to potential incidents in real time, offering greater insight into how this relationship functions.