Reputation Risk and Potential Profitability: Best Practices to Predict and Mitigate Risk through Amalgamated Factors

Abstract

Reputational risk is a significant corporate issue. Reputational risk is an issue for businesses’ financial stability and long-term sustainability. With mounting oversight and regulatory requirements, stakeholder influence, and social media’s influence on consumer opinion, there is a need to identify and mitigate the damage of reputational risk to achieve projected profitability. Digital platforms enable consumer scrutiny beyond organizational control. A benefit of forecasting is that it enables deep consideration of a company’s vision and strategy. Despite the growing severity of reputational risk, organizational leaders continue to ineptly manage reputation by failing to appropriately integrate forecasting into risk management programs. Some organizational leaders have also neglected to implement viable risk management programs that enable proactive responses to reputational risk. The costly oversight of reputational risk has caused the loss of customers, industry standing, and revenue. The purpose of this qualitative phenomenological structured interview research study was to identify the best practices of predicting and mitigating reputational risk to achieve projected profitability. Structured interviews with 16 professionals with extensive risk-managing experience provided the data. The research questions were the means used to understand the commonalities of risk management in organizations. The qualitative content analysis of the structured interview data produced 28 themes of reputation risk and potential profitability in three high-level categories: risk coverage to achieve financial objectives, leading practices to mitigate reputation risk, and business process improvement techniques. The findings provided the best practices to manage reputational risk.