Company reputation and the fallout from reputational damage are the number one strategic risk for large companies, according to a global survey, Exploring Strategic Risk, released by Deloitte. Overall, progress on strategic risk management is evident, though most executives admit that their programs do not support their business strategy well enough.
Reputational risk was ranked third among strategic risk concerns three years ago, according to companies surveyed. Also back in 2010, brand and economic trends were identified by senior executives as the key strategic risks, though both have fallen since.
In some industry sectors, reputation has risen from outside the top five strategic risk concerns to the top of the list. In the energy and resources sector, for example, reputation ranked only eleventh on the list of strategic risks in 2010, though three years later it has risen to the top spot.
The rise of reputational risk as the key strategic risk is mirrored by executives listing social media, which has transformed reputation management as the biggest technology disrupter and threat to their business model. Nearly 50% listed this above other technologies such as analytics, mobile applications and cyberattacks.