Why is it so simple for a company to think about operational risks, yet hard for them to understand the risks that threaten their company reputation? Could this be attributed to a lack of ability to perceive intangible risks, as opposed to more obvious tangible risks.
Don't they understand that the intangibles are far more likely to threaten share-holder value that any other form of risk?
We recall the cases where intangible risks has threatened shareholder value, such as the finger that alledegly found its way into a bowl of chilli at a fast food restuarant or the CEO who had allegedly been watching pornography on his computer (which he denied infatically). Or where the claims manager of a well respected underwriting firm was fired for setting up bogus policy holder accounts and making claims through them.
In each of these cases it is not difficult to understand just how devasting the outcome would be, both in terms of the negative media exposure in the market and the resulting financial losses.
In fact the impact could be far worse to the brand itself, hampering its development for many years to come.
Much of the shortcomings of todays business managers emanate from a general disregard for assessing the risk of intangibles, prefering to concentrate on those risks that can be more easily identified. The tangible risks, such as infrastructure, finance and product development.
At Brand Killer Robots we call for the introduction of a new formal approach to the identification, visualisation and assessment of risk in the area of intangibles - in order to reduce risk to shareholder value.
If you would like to know more about our work in this area: email email@example.com