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What is a consumer company’s greatest asset? Ask that question of any CEO, analyst, employee, customer or supplier and the likely answer will be — "Reputation." Ask those same stakeholders to name the company’s greatest risk and the answer remains the same — "Reputation." Consumer products manufacturers, retailers, and others along the supply chain (collectively "Retail and Consumer" companies) are more prone to reputation risk today than ever before. The current environment needs very little to create corporate scandal.
Despite the importance of their companies’ reputations, relatively few Retail and Consumer companies have a comprehensive framework, approach, and infrastructure in place to identify and manage reputation risks, including evaluating related controls, and allow them to respond quickly and effectively if a damaging event were to occur. Without such a plan, Retail and Consumer companies are exposed to ever-expanding business land mines capable of destroying even the most pristine of corporate reputations.
This white paper offers Retail and Consumer companies a practical plan for responding to these challenges and building a program to effectively manage and mitigate reputation risk. This includes avoiding disaster and, more generally, the process by which Retail and Consumer companies assess and protect against devaluation of their image and reputation among various stakeholders. The paper builds upon work already required by Sarbanes-Oxley §404, particularly regarding antifraud programs and controls, and expands upon the recently issued Enterprise Risk Management -- Integrated Framework of the Committee of Sponsoring Organizations of the Treadway Commission. This white paper also explores the challenge of defining "reputation" when there are multiple stakeholders, measuring the value of reputation in financial terms, and identifying key reputation risks faced by Retail and Consumer companies.
Download: Predicting the Unpredictable (PDF 822 KB)
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