Glossary definition: Reputational Risk

Managing Reputational Risk: Protecting Your Business's Good Name

Reputational risk is the risk of damage to a company's reputation, resulting from adverse events or negative publicity. It is a type of non-financial risk and can be difficult to quantify, but can have a significant impact on a company's ability to attract customers, raise capital, and maintain relationships with employees, suppliers, and other stakeholders. Reputational risk is often caused by a company's failure to meet customer expectations, unethical behavior, or a lack of transparency. It can also be caused by events outside of the company's control, such as a natural disaster or a scandal involving another company in the same industry. Companies can manage reputational risk by monitoring their public image, engaging in corporate social responsibility initiatives, and having strong internal controls in place.