Manage Tomorrow's Surprises Today

Steven Minsky

How to Tackle Reputation Risk with a Risk Taxonomy

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risk taxonomyFifteen of the world's top risk managers met recently at the 2013 RIMS Risk Summit. When the topic of reputational risk arose, the group struggled to develop a concrete value proposition, but unanimously agreed that no ERM assessment that failed to tackle reputation risk would be deemed complete by leadership.

Their recognition calls attention to one of the biggest hurdles confronted by risk managers in all industries when faced with high level risks deemed critical by the board or executive leadership. How does a risk manager take a strategic goal, such as reputation enhancement, being the "provider of choice," or exhibiting responsible citizenship, and pin it down to measurable and actionable initiatives?

The key is installing a risk taxonomy that is dynamic enough to map the front line risks faced everyday with the strategic priorities of leadership.

Let's take, for example, the recent trend of Fortune 500 companies across the globe to integrate Corporate Social Responsibility (CSR) as a core business competency. Initiated by leadership, the ultimate ability for organizations to demonstrate good citizenship falls to front line managers across the enterprise. As a risk manager, how valuable would it be to drill down into your risk library, identify the risks associated with CSR, and then aggregate and report on the risks to that strategic goal?

This is just one example of how establishing an ERM Process can turn abstract goals into measurable achievements. The same concept can be applied to reputational risk, financial objectives, safety concerns, and countless other management level objectives. With the right tools, Risk Managers are able align their activities with their organization's unique risk appetite, allowing them more time to identify gaps that put their company in jeopardy.

Interested? Request a free Proof of Concept where we'll demonstrate the benefits of our ERM framework with your existing data. For more information on the RIMS Risk Management Society, we invite you to take the RIMS Risk Maturity Model to evaluate your organization.

 

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In this blog, risk expert Steven Minsky highlights the differences between traditional risk management and true enterprise risk management, which is about helping things happen rather than preventing them from happening. Manage Tomorrow's Surprises Today is designed to help you think about risk in new ways and learn how to benefit practically from this rapidly evolving field.

Steven Minsky

Steven Minsky is the CEO and Founder of LogicManager. the recognized leader of enterprise risk management solutions and is also the developer of the RIMS Risk Maturity Model for Enterprise Risk Management™. LogicManager provides a common, intuitive software-as-a-service platform of scientifically validated enterprise risk management decision and diagnostic tools for more effective corporate governance, risk and compliance.

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