Managing reputational risk

Find out ways you can mitigate the potential for reputational risk in your business.

Managing reputational risk
<h3>What is reputational risk?</h3> <p>Reputational risk is a threat to the brand of your business. Usually due to an event that causes negative public perception or bad publicity.&nbsp;</p> <p>&quot;It takes many good deeds to build a good reputation, and only one bad one to lose it.&quot; - Benjamin Franklin<br> </p>
<h3>Examples of reputational risk</h3> <p>A business decides to launch a new product to market. In order to launch the product quickly, the usual quality testing processes aren't completed. The product gains a reputation for breaking easily, so sales and the business's reputation drops. The product is relaunched having gone through a much more stringent quality testing process and is much higher quality, however sales don't improve as the brand is now viewed as cheap and unreliable.&nbsp;</p> <p>Reputational risk can also occur due to events outside of your control, for example, if a hacker was to access all of your customer's private information and publish it online. Or if you hire a staff member who handles a customer complaint badly and that customer records their response and takes it to the media.&nbsp;</p>
<h3>There are ways to mitigate these types of risks to your brand</h3> <p>ASB's five tips to mitigate damage to your brand.</p> <h3>1. Protect yourself against data breaches.</h3> <p>Make sure you back up your data, secure your devices and network and encrypt important information. Read the <a title="Top 11 cyber security tips" href="" target="_blank">top 11 cyber security tips</a> by CertNZ.&nbsp;</p> <h3>2. Be vigilant about customer service mishaps.</h3> <p>Make sure you have customer service training for all of your employees to ensure they understand the importance of professionally (and successfully) dealing with complaints. Find out what you can and can't do on the Ministry of Business, Innovation and Employment <a title="Ministry of Business, Innovation and Employment" href="" target="_blank">website</a>.&nbsp;&nbsp;</p> <h3>3. Ensure your hiring process contains thorough background checks.</h3> <p>Background checks and other pre-employment checks are a smart step to include in your hiring process. Find out more about hiring by reading our <a href="/content/asb/businesshub/en/businesshub/resources/protecting-your-business/your-guide-to-hr.html" target="_self">HR guide</a>.&nbsp;</p> <h3>4. Adopt core values into your business that your employee can get behind.</h3> <p>Pick four or five core values that you want your businesses to be governed by. Common values include diversity, accountability, innovation, passion, integrity and respect.&nbsp;</p> <h3>5. Have a 'crisis' communication plan.</h3> <p>If something does go wrong, you need to be prepared to respond quickly. Having a crisis communication plan specifically for your business is essential. It could be as simple as having a list of all potential risks with your planned response to address them listed.&nbsp;</p>
<h3 style="text-align: center;">TIP:&nbsp;</h3> <p style="text-align: center;">Watch our ASB expert, Paul Gestro, provide his top tips when looking at <a title="Ensuring your business is protected" href="" target="_self">ensuring your business is protected</a>.&nbsp;</p>