Risk of Risks

Abstract

Reputation risk can be defined as a situation or series of events affecting a company that can either strengthen or weaken the company’s credibility and the trust of stakeholders in the company. The manifestation of reputation risk can cause direct business losses and weaken significantly a company’s legitimacy. Reputation risks typically involve considerable negative publicity. What is essential is that the creation of reputation risk is not dependent on the real state of affairs but rather on the views of stakeholders regarding the situation. In the era of digital communications, crisis management skills play a guiding role in navigating companies through a sea of reputation threats. Mistakes, accidents, and failures happen to all companies. It is not so important what caused the situation, but rather how the situation is resolved and how the acute crisis is managed.