Reducing reputational risk

Abstract

PurposeThe purpose of this paper is to establish how executive managers in a South African organisation prioritise and manage reputational risks arising from stakeholder claims. The authors establish how corporate reputation and reputational risk fits into their decision making when considering stakeholder claims.Design/methodology/approachThe authors conducted in-depth interviews with the top management of a South African paint manufacture. They identified eight stakeholder claims and discussed how they assessed and addressed each one.FindingsRespondents identified highly, moderate, and low salient claims. They reported on how they dealt with these different claims in terms of the attributes of power, legitimacy, and urgency.Originality/valueThis is an empirical theory-testing study of how managers deal with stakeholder claims. The authors establish how corporate reputation and reputational risk fits into their decision making when considering stakeholder claims. The authors suggest that managers must not only understand who their stakeholders are, but need to evaluate the impact of stakeholder claims in order to manage reputational risk.