Managing Fraud Risk: A Practical Guide for Directors and Managers

The Key Risk – Reputation

The threat of damage to reputation, whether personal or corporate, is one of the biggest risks of the 21st century. Reputation itself has various components which go beyond the essentials of technical skill and craftsmanship: consistency of performance is crucial as it is past performance that establishes an organisation's track record; the track record leads to the key concept of integrity, of doing the right thing first time, every time; integrity builds up trust, the “x-factor” which may be described as the residue of promises fulfilled, and includes the key management challenge of matching the behaviour of their people with the corporate values of the organisation; trust leads to respect and to positive public perception. All of these factors combine to bring the prospect of sustainability and long-term success. For a company these components provide the essential building blocks on which corporate branding and image can be built. For individuals, they provide the essence of our character, of our personal brand if you will.

There are many, many examples that illustrate the truth of the maxim that reputation takes years to build but only seconds to destroy. In terms of what can happen to individuals, the maxim is illustrated very well by the recent and dramatic fall from grace of the British fashion designer John Galliano. In 2011, following an anti-Semitic outburst at a nightclub that was widely reported in the press, Mr Galliano was quickly dismissed ...