For the second year in a row, a survey of members of corporate boards found that their major concern, aside from financial risk, is reputational risk.
Two-thirds (66%) of the directors on the boards of more than 190 public and privately held companies surveyed by the accounting firm EisnerAmper reported reputational risk remains their biggest nonfinancial concern, down slightly from the 69% who said the same thing last year.
“Risks are integrated, and reputational risk is a part of most risks,” says Noel Seaman, a board member of the Risk Management Society (RIMS), and manager of risk management and insurance at the University of Saskatchewan in Canada. Seaman says his institution views reputational risk as an “impact risk” of other risks.
According to the survey, the categories of risk where reputational impact is of biggest concern include operational issues such as product liability, succession planning and IT systems, as well as fraud and inadequate training of employees.