STRATEGIC & REPUTATION RISK
On average, at least 25% of a company's value is linked to its reputation, according to a World Economic Forum study.
It could even be more, considering that this asset is so invaluable that it conditions the survival of an organization. To find out how companies around the world are addressing this issue, Forbes Insights surveyed 300 executives from all industries and geographies about their reputation risk.
87% of executives surveyed believe that reputation risk is "very important" or "extremely important.
Respondents believe that responsibility for reputation risk lies at the highest levels of management: CEO (36%), chief risk officer (21%), board of directors (14%), or CFO (11%).
Reputational risk is correlated with many other risks, particularly those related to ethics and integrity (such as fraud and corruption). Security risks are also related, including physical and electronic intrusions. This is followed by product and service risks (safety, health and environment).
Risks posed by third-party relationships are increasing significantly, as companies are increasingly held accountable for the actions of their suppliers or resellers.
The idea is simple to grasp. The objective of recent economic action by governments or regulators is to reduce financial instability. This objective is leveraged by reducing market volatility.
However, an undesired effect seems to be emerging: while regulation does tend to reduce volatility, it also makes markets more rigid.
volatility, it makes the system more rigid and imposes constraints on it that could lead to sudden and large-scale movements.
In other words, it seems that some rules do indeed reduce volatility, but at the cost of increasing the probability of jumps. In a way, they would exchange the risk due to volatility for a risk of jumps.
Viruses, hacking, employee malice... Cyber risks have become an undeniable reality. They can have serious repercussions on your business and your image.
Today, one in two executives say they are concerned about cyber risk. More alarmingly, in 2015, the number of cyber attacks increased by 51% in France. Cybercrime is now in the headlines and continues to increase.
As for SMEs, they are not immune either since they usually have very few IT resources. Hackers face very low technological barriers.