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How to Protect Your Company’s Reputation Against Damaging Incidents

A company’s reputation can be its strongest asset but also its most vulnerable. A single crisis can cause irreparable harm and bring a business it to its knees.

A recent survey by Deloitte found that 87% of business executives believe that reputation is their largest risk area and only 19% think their business is adequately protected.

Now that social media and other online sources have accelerated news coverage, you may only have minutes to respond to a crisis and protect your image. The failure to quickly and effectively address a crisis can result in lost business, litigation, regulatory fines and more.

The Many Forms of Reputational Risk

The damage to a company’s reputation is often the result of other risks. For example, a cyber attack that disrupts your operations is generally not considered a risk to your reputation. However, an extended disruption could cause customers to think less of your business and its products.

Here are some risks and events that can be damaging:

  • Product recalls or concerns over product quality
  • Allegations of poor or improper business practices
  • Health or safety incidents, involving either employees or customers
  • Regulatory investigations
  • Negative associations with third parties

The Role of Social Media

Social media can be a powerful tool to connect with customers and extend your reach, but it can also be used to quickly spread negative publicity.

In an increasingly connected world where anyone with a smartphone can act as a journalist, any negative experience a consumer has with you can potentially go viral and be seen by thousands – even millions – of people. Ensure that your company has a social media presence that is constantly monitored, and that it quickly responds to any criticism or negative customer experiences.

Online review services can also hurt your brand and result in lost business. While the best way to combat this is still by maintaining effective and comprehensive quality control, it’s important to regularly check online sources to get feedback on your products and identify malicious or false information that could reflect poorly on your image.

Strategies to Lower Reputational Risks

There’s no such thing as complete protection from risks, but there are strategies you can use to limit exposure and respond to a potential crisis:

  • Create strong, relevant corporate values. Upper management should create – and regularly communicate – strong corporate values that permeate every level of your business. Though these may be created by upper management, they should reflect the values of all of your employees and stakeholders.
  • Integrate a risk evaluation into business planning. Identify the opportunities, threats and assumptions that accompany your business’ plans and strategies. Don’t assume that longstanding strategies or well-developed plans are free from reputational risks; instead, develop hypothetical scenarios to identify how your reputation could be affected.
  • Promote positive interactions with customers and other stakeholders. You can strengthen your reputation before a crisis occurs by aligning your goals and connecting with your stakeholders. Customers appreciate regular and positive interactions, and you can use social media as a tool to reach out to them.
  • Develop a reputation plan. Train everyone at your company on how to recognize a reputational crisis, and put together a response team. Your plan should identify all potential risks to your reputation and map out a response for each. These responses should include key statements that identify at least three talking points and restate your company’s core values. If a crisis occurs, distribute relevant messages as quickly and widely as possible.


In the event of a crisis, you must respond quickly and decisively:

  • Don’t sacrifice your reputation to protect your finances or products. It’s usually more prudent to recall a dangerous product immediately; for example, if it’s discovered that you delayed a recall at the expense of health or safety, you could face a huge public relations disaster.
  • Respond to questions and concerns. If you attempt to stay under the radar during or following a crisis, it will only cause negative attention to linger. Instead, respond to any concerns and continue to communicate your corporate values.
  • Always remember the broad range of your reputational risks. Following a crisis, you may only focus on preventing a similar incident in the future. Be sure to keep all of your risks in mind.

It’s inevitable that every business will experience some form of reputational damage, but there are ways to limit your exposures and to cover losses. Contact an Acera Insurance advisor to learn more.