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ABSTRACT
The oil and gas companies face a number of risks but the most critical one is the risk of corporate reputation. Corporate reputation can be a key contributor to an organization's success but can also lead to an organization's failure. Evidence has linked corporate reputation and reputation risk management (RRM) with many intangible and tangible assets, with scandals from media activists and public opinions. This study introduces and explains the reasons why International Oil Companies' (IOCs) Reputation Risk Management (RRM) has led to the oil's sector reputation damage. It also presents a critical review of policy issues and approaches for managing reputation risk in the petroleum industry. The conclusion of the study is that RRM and corporate reputation influence IOCs' communication with the public, contributes to enhancement of international law when associated with transparency, but, sometimes make IOCs vulnerable to external threats. The study proposes that corporate social responsibility (CSR) can enhance corporate reputation risk management approaches, but, is not enough unless development of the appropriate culture through implementation of effective risk management policies takes place.
Keywords: Corporate reputation, Reputation Risk Management (RRM), International Oil Companies (IOC), Corporate Social Responsibility (CSR).
1. INTRODUCTION
The petroleum industry is one of the largest, most complex and important global industries in the world as it touches every part of the human life with products such as gasoline, gasoil, asphalt, lubricants and numerous of petrochemicals. Unlike the financial institutions and other service organisations, the activities involved in producing these products are difficult, expensive and risky. These factors expose the petroleum industry to a large pool of risks including natural, engineering, management and economic. All these risks either individually or collectively affect the performance and reputation of the petroleum industry in case of an occurrence (Yanting and Xing, 2011; Inkpen and Moffett, 2011).The importance of risk analysis in the petroleum industry over the past years has received much attention. Yanting, and Xing, (2011) investigated risk management of petroleum operations and found that, the top priority for petroleum enterprises is the establishment of risk management system and control mechanisms in accordance with features of petroleum operations to meet the needs of modern management. Andersen and Mostue, (2012) also studied the risk analysis and risk management approaches applied to the...