The rules of reputational risk management are changing. The digital world means that organisations now need to manage brand perceptions across a wider range of channels, some of which are much less tangible than others.
Data assets are just one of these intangible factors that can greatly affect a company's public perception. People place significant value on their personal data, even more so when it is shared with a company under the pretence of security.
For this reason, data breaches are big news. The larger the company and the more personal information lost, the more it resonates with the public.
What are intangible assets worth?
Trying to convert the value of intangible assets into tangible forms is challenging industry experts. According to an October 2014 Wall Street Journal article, the prevailing view of the situation is that a worrying percentage of companies simply can't account for what their data is worth.
The article includes an estimate from Federal Reserve Bank of Philadelphia Economist Leonard Nakamura, who believes the global value of data and similar assets could be as high as US$8 trillion. The scope of the issue is compounded by the fact that these aren't accounted for on company financial statements, further skewing the results.
However, the reaction to incidents where these assets are compromised highlights the effect that can have on perception management.
For example, Sony was put under scrutiny by millions of people in 2011 when its PlayStation Network service was the subject of a cyberattack that compromised the credit card details of its users.
Not only did the hack cause reputational damage to the company, it impacted Sony financially when it was forced to compensate all users of the service.
What are the risks of cybercrime?
PricewaterhouseCoopers (PwC) released a report that businesses are beginning to understand the relationship between cybersecurity and perception management.
Worryingly, businesses are having to manage even more of these events now than they did in the past. According to PwC's research, more than three-quarters (79 per cent) of respondents had a cybersecurity incident over the past year. Any one of these could have sparked a similar event to the one Sony was forced to deal with in 2011.
The firm advocates transparency when it comes to communicating these issues to the public. In the event that a breach occurs, companies should be open and honest about what went wrong and how they're fixing it.
While businesses are more at risk than ever before, they're also more informed, allowing them to manage the reputational risk in an effective manner.