Managing Risk and Performance: A Guide for Government Decision Makers

Chapter 11

Managing Reputational Risk

Gary L. Glickman

Senior Policy Advisor, U.S. Department of the Treasury¹

The way to gain a good reputation is to endeavor to be what you desire to appear.

—Socrates

Government managers know the importance of building and maintaining a strong reputation. They know that their reputation will affect their budgets and probably more importantly their autonomy. Yet why is it that government organizations seem to be more and more on the defensive? How can agency leaders start to address this growing concern proactively?

Corporations zealously guard their reputations. A 2005 survey of 269 senior executives conducted by the Economist Intelligence Unit concluded that “reputational risk emerged as the most significant threat to business out of a choice of 13 categories of risk.” In the private sector, many corporations see brand management as the lifeblood of their company, and reputation is a core component of brand management. What do you think of when you think of Apple, Microsoft, IBM, or GE? Each has a distinctive image that comes from years of marketing, product development, and building and defending reputation. And each has developed sophisticated programs to help guard and manage that reputation. Corporations are sensitive to the old adage that a dirty airplane is an indication that something else must be wrong. Inattention to the appearance of the aircraft could be indicative of poor maintenance, or it may just be the impression it leaves. Either ...