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Blog : BOARD TALK

Best Define 'Reputation' First

Posted on January 16, 2017 at 8:30 PM

I have been watching Michael Gove talk about his scoop interview with Donald Trump in the background on the television news. It reminded me how hard it is today to filter the dross that is thrown out by the internet. Even more, how hard it is to hang onto one's values and support what seems to be the best way forward to live upto them.


Are hard copy published books offering tips on the future for business any more full of 'real' ideas and therefore more valuable ? More to the point, consider this: have you ever read a bad review of a management book ? Or are they just part of a well-oiled machine between publishing and business media, where mutual 'likes' take everyone forward ?


Rethinking Reputational Risk: How to Manage The Risks That Can Ruin Your Business, Your Reputation and You by Anthony Fitzsimmons and Professor Derek Atkins is just out this month. It's hard to find anything at fault with a title like that. It has a list of BIG names endorsing it. The Financial Times ended its short review by saying :

 

"Warren Buffett once wrote in a letter to his top managers: 'We can afford to lose money — even a lot of money. But we can’t afford to lose reputation — even a shred of reputation.'

 

The stakes, and risks, are high. 'Your reputation is the sum total of how your stakeholders perceive you,” the authors say. Businesses and executives are therefore vulnerable on a number of levels. They would do well to reflect on the serious messages contained in this well-argued book.'


Let me be clear: I have not read the book, but I have read snippets of it. And I became very stuck on Page 16. Here, the authors write:

"How is a good reputation valuable?

A good reputation confers opportunities that are often hard to value. For example, it may give you the opportunity to charge a premium price; make you a seemingly more desirable trading partner or support your ‘social licence to operate’ relatively free of interference by (or with support from) society such as local people, regulators and lawmakers." (my emphasis).


I haven't asked them, but I wonder if the authors think there is any ethical component to reputation? Because as far as I can tell, by a 'premium price' they mean more than anyone else can charge. I question "seemingly" in front of the goal of being a more desirable trading partner. And I completely despair at the fact that social licence to operate is in quotation marks. It's a real thing, you know - the debate about the role of business in society.


'Free from interference' is also an interesting phrase, used here to lump together a good mix in my view: 'local people, regulators and lawmakers.'


I was looking at this book to see what it said about cognitive diversity in boardrooms and any link to reputation. And perhaps it is unfair to focus on only one short paragraph - but as I say, I got stuck.


I am sure it is educational in its outlining of many instances of reputational risk in business. Its publishers say it is "An essential read for risk professionals, business leaders and board members who need to understand and deal with business-critical threats to their reputation, this book presents a new framework that will be invaluable for all involved in safeguarding an organization's reputation."


But for my time and money, I would say to all board members: spend that time defining what you mean by 'reputation' and making sure that everyone affiliated with the business buys in. And then devise a business plan from top to bottom that delivers it.






 





 


 




Categories: Governance, Accountability, Reputation