The first trend the 2018 GRC market report points to is the increasing importance of a corporation’s reputation. The report reads, “Corporate reputations are at risk. The hit to their reputation after a mishap, and the ensuing loss of customers and other stakeholders, damaged companies more than any other category of loss.”
I have often gone to great lengths to bring attention to the reputational consequences of a scandal. United Airlines reached a settlement with Dr. Dao, the man they dragged off one of their flights. But the amount paid in this settlement is likely nothing compared to the reputational damage the airline incurred.
The see-through economy has a specific connection to this scandal. With 66,000 passengers involuntarily bumped from United flights in 2016 alone, it would be naïve to assume this is the first time this situation escalated to conflict. In truth, this was the first incident caught on tape, or rather, caught on smartphone.
United’s market value plummeted by $1 billion the following day, proving that reputation is a huge concern for shareholders. And while their value has slowly risen since the incident, there is no denying that customers and competing airlines have taken note of this mishap and are expecting better.
The benefit of governance, risk and compliance tools in regard to this trend is their ability to integrate and account for reputational risk across silos.