A Framework for Integrating Reputation Risk Into the Enterprise Risk Management Process

Reputation risk is becoming a serious concern for financial services firms, yet is poorly understood and not well-managed. This article develops a five-step process to enable firms to integrate reputation risk management into their enterprise risk management structures. Firms should set a strategy for reputation risk management, define the objectives,and set the metrics by which reputation damage is measured. Risks to reputation are then identified, prioritized, and treated. Because insurance is not available to protect firms against the loss of reputation value after a reputation damaging event, communication with the media and key stakeholders is discussed as a risk mitigation strategy.