corporate reputation managementThere’s a big problem with reputation management in corporate America. The problem – common in most major corporations — is that no one person is responsible for managing a company’s reputational risk. Many different corporate departments including public relations, marketing, brand management and risk management share some level if responsibility for reputation management.

Typically, PR takes the lead responsibility. But – there’s another problem. Often, no one person within PR has full responsibility for corporate reputation management. Responsibility (and authority) is spread across multiple personnel within PR.

Problem with Shared Responsibility

The view that everyone is responsible for the important task of corporate reputation management may in reality mean no one is. No one is accountable; no one has the authority to identify reputational risks and instigate change.

That may pose a dangerous situation, given the importance and fragility of corporate and/or brand reputation. A reputation developed carefully over the years may crumble overnight under the onslaught of social media attacks. Online criticism can undermine the reputations of even the largest organizations.

That’s why most larger corporations and not-for-profit organizations would benefit by installing a chief reputation officer to oversee reputational risk throughout the organization, offline as well as online.

Different from Crisis Management

Reputation management is not the same as crisis management. Reputation management is a proactive strategy. Crisis management is a reactive strategy. It involves responding to a reputational risk that has already occurred.

Reputation management isn’t the same as traditional marketing or public relations either. “It’s a more holistic view of your reputation – from how people answer the phones at your call center, to how visitors are greeted by receptionists, to what people say about you on Twitter and Facebook, to what the media are saying about you,” Jennifer Janson, managing director of Six Degrees Ltd, told The Globe and Mail. It’s also about how the company treats employees, markets its products or services, interacts with customers and the community, implements its corporate social responsibility and many other factors.

Companies could assign the responsibility to the chief risk officer or a high-level communications expert, rather than creating a new position. Either way, the position must have broad powers, which communications and risk personnel typically lack, Janson cautions. Chief risk officers tend to be preoccupied with compliance. Instead, she suggests a chief reputation officer who can be a “sparring partner” with the chief risk officer.

The head of corporate PR can certainly function as chief corporate reputation manager. To do so effectively, that individual needs the ear and full respect of the CEO and the authority to identify reputation risks and compel fixes of processes that negatively impact corporate reputation. The individual in charge of corporate reputation management must be empowered to speak truth to the king who has no clothes – and to arrange the necessary wardrobe fixes. Not all corporate heads of PR enjoy that level of access, trust, responsibility or authority.

Some might argue that the CEO or the Board of Directors have ultimate responsibility for reputation management. That’s certainly true, but no CEO has the time and few have the inclination to take charge of day-to-day operational responsibilities of corporate reputation management. That goes double for Board members or committees.

Reputation Management Responsibilities

Michael Volkov, CEO and owner of the Volkov Law Group LLC, urges assigning the responsibility for corporate reputation management to a senior executive who would report regularly to senior management and the board about the company’s reputation and risks.

“Managing reputational risks requires attention and authority,” Volkov states. “In most cases, reputational risks are managed piecemeal in different parts of a company.”

The senior corporate reputation manager would:

  • Assess the company’s reputation,
  • Evaluate the reality of the company’s reputation,
  • Identify and close gaps between reputation and reality,
  • Monitor stakeholder beliefs and expectations,
  • Monitor and benchmark peer performance in the industry,
  • Continually measure and monitor the company’s reputation.

Personnel in a company’s marketing, investor relations, adverting, human resources and PR departments monitor different aspects of corporate reputation.

“A senior risk manager has to bring together these disparate functions by organizing information and data from these sources and using technology to monitor these operations,” Volkov says. “A dashboard for reputational risks would not be hard to create or difficult to maintain.”

Bottom Line: Assigning reputational risk management to a single person creates accountability. A single high-level risk manager can better ascertain, protect and improve a corporation’s reputation than disparate personnel responsible for other unrelated tasks. Companies typically spread reputational risk management across different departments, which dilutes the importance of the vital function and discourages organization.

This post was first published on the CyberAlert blog.

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