STRATEGIC & REPUTATION RISK
On average, at least 25% of a company's value is linked to its reputation, according to a World Economic Forum study.
This could even go beyond that, considering that this asset is invaluable because it is so crucial to the survival of an organization. To find out how companies around the world are addressing this issue, Forbes Insights asked executives from all industries and geographies about their reputation risk. 87% of the executives surveyed believe that reputation risk is "very important" or "extremely important".
For respondents, responsibility for reputation risk rests with the highest levels of the hierarchy: CEO (36%), risk management manager (21%), board of directors (14%), or financial director (11%).
Reputation risk is correlated with a large number of other risks, particularly those related to ethics and integrity (such as fraud and corruption). Security risks are also related, including physical and electronic intrusions. Then come the risks related to products and services (safety, health and environment).
The risks posed by relationships with third parties are increasing significantly as companies are increasingly held responsible for the actions of their suppliers or resellers.
The idea is simple to grasp. The objective of recent economic action by States or the regulator is to reduce financial instability. This objective is based on reducing market volatility.
However, there seems to be an undesirable effect: if regulation does tend to reduce volatility, it stiffens the system and places constraints on it that could lead to sudden and large movements.
In other words, it seems that some rules do indeed reduce volatility, but at the cost of an increase in the probability of jumps occurring. They would somehow exchange the risk due to volatility for a risk of jumps.
Viruses, hacking, employee malice... Cyber risks have become an indisputable reality. They can have a serious impact on your business and your image.
Today, one in two leaders say they are concerned about cyber-risk. More alarmingly, in 2015, the number of cyber attacks increased by 51% in France. Cybercrime is now making the headlines and continues to increase.
As for SMEs, they are not immune either since, generally, they have very few IT resources. Hackers face very low technological barriers.