On the topic of Reputation...

In response to recent calls by Liberal Democrat peer and barrister Lord Lester to modernise UK libel laws, I have decided to focus this entry on one element of libel – Reputation.

A good reputation in business is established by gaining and retaining the confidence and trust of a business’s stakeholders (customers (or in the case of Apple Inc., worshippers), suppliers, employees, and of course, shareholders). Although some business reputations may be gained over a relatively short period of time (consider Google and Facebook), most frequently it takes longer to maintain trust and confidence of stakeholders through differing economic cycles.

You need look no further than the recent travails of Toyota and more latterly, BP to realise that business reputations, though hard to win are quickly lost. Loss of confidence by any group of stakeholders, particularly consumers and shareholders, can quickly lead to the decline of any enterprise (though it should be noted that we have no idea as to the long-term impact to both BP & Toyota – time will tell), most strikingly in service businesses such as professional services or finance. Remember Arthur Andersen LLP?

Reputational Risk

Without a reputation, you have no business; therefore reputation is important to any enterprise.

Although reputation is an intangible, it is a highly prized, invaluable asset, which is intrinsically linked to the goodwill of the business. It is viewed as the most critical risk and a key source of competitive advantage as products and services become more replicated and less differentiated.

Good reputational risk management is achieved by managing all other risks satisfactorily. However, changes in business practices arising from increasing governance, red tape, legal and regulatory influences have made companies more vulnerable to reputational damage. Equally, the pervasiveness and intrusiveness of media (particularly social media) and communications industries has intensified the focus on both corporate and high profile individual reputations.

You = Brand

As a celebrity or other high profile individual, you are your brand.

In today’s celebrity-obsessed, paparazzi-filled world, actions are microscopically scrutinised to stalker-esque levels, with the mainstream and social media ready to pounce on the slightest chink in celebrity armour. Although for some, any publicity is good publicity, for others (who shall remain nameless), this is not always the case… their names are added to the proverbial “Where are they now?” lists and consigned to nostalgia conversations and the occasional pub quiz.

Celebrity reputational management is therefore a must in order to retain a degree of control of both on and off-line media. Whether you are selling books, music, movies or lending your voice or likeness to market someone else’s products or services, you are the commodity and – for the benefit of you, your family, friends and other “stakeholders” – your reputation and character must be protected.

Reputational Management Basics

Managing reputations comes from the top. In a business, this runs from the CEO, Board of Directors, senior management downwards. If you are a high profile, public personality, then it starts with YOU.

Key elements of managing reputational risk: