Today, reputation and brand count for a lot. Consumers decide whom they want to do business with based on how well they can trust them. In turn, investors will only support companies with a large, loyal customer base.
A new trend is also arising called ESG investing, where investors looks at the environmental, social, and governance impact of a company, in addition to their financials.
Regulations are also a huge concern for companies who deal with consumer data, which is just about all of them. For instance, the GDPR goes into effect May 25, 2018. This new data privacy regulation will apply to every organization that handles the data of EU residents. If this data is compromised, the penalty can be as high as €20 million, or 4% of the worldwide annual revenue of the prior financial year, whichever is higher. As a travel site, Orbitz would undoubtedly be subject to such regulation.
Because of the reputational and regulatory risks that accompany scandals, every scandal has the potential to have a large-scale impact. These risks are the results of the see-through economy, an age where consumers and investors are empowered by new technologies to define their expectations, lobby for stricter regulations, and impact a company’s reputation.
However, the see-through economy doesn’t have to be a concept that companies operate in fear of. In fact, companies will do well to embrace the see-through economy and use it to their own benefit. New technologies also make it possible to turn every employee into a process improvement specialist. With the right tools, they can be the eyes and ears of every level of your organization. They know the risks the company faces, they just need the opportunity to escalate them.
Here are some steps to embracing the see-through economy, and preventing large-scale scandals:
- Administer standardized risk assessments to front-line employees across the enterprise to identify and assess key risks
- Enable online incident reporting in a way that connects incidents to their root-cause to better identify trends and design streamlined controls
- Conduct thorough due diligence on third-party relationships to mitigate risks on their end that could impact your company’s operations and reputation