One of my favorite virtual friends is Dr. Andrea Bonime-Blanc, the CEO and founder of GEC Risk Advisory LLC. While her career and current consulting is wide-ranging, I want to focus on her recent book, The Reputation Risk Handbook, which should be read by any compliance practitioner, senior executive or board member.
Why should you read this book? Because: “Reputation risk has become strategic because of the age of hyper-transparency.” The book provides a variety of examples of reputation risk and explains its special nature. It also provides strategies for management of reputation risk.
Bonime-Blanc also explores the veiled land of the future to opine on not only risk management techniques but also the “transformation of this risk into an opportunity and value for the organization.”
Her book is organized into three general areas, I. Understanding Reputation Risk, II. Triangulating Reputation Risk, and III. Deploying Reputation Risk.
Understanding Reputation Risk. You have to love any chapter about reputation risk that begins with Mae West. Bonime-Blanc uses this somewhat salacious introduction of the topic to lead to her formulation of a definition of reputation risk, which she says “is an amplifier risk that layers on or attaches to other risks — especially ESG risks — adding negative or positive implications to materiality, duration or expansion of other risks on the affected organization, person, product or service.”
Triangulating Reputation Risk. Here Bonime-Blanc walks the reader through the traditional stages of an entity’s approach to risk management and then explains why such an analysis does not work well with reputation risk. Simply put, reputation risk cuts across all types of risk that a company might face but more importantly the type of traditional risk management solutions that a company might try and bring to bear on reputation risk. However, channeling her inner Kirosawa, Bonime-Blanc points to the greatest anomaly of reputation risk and what separates it from other risk that a corporation might face. She calls it “The Rashamon Effect” because “it is in many ways in the eye of the beholder.
Deploying Reputation Risk. In Part III, Bonime-Blanc explores reputation risk management strategies for her audience. In addition she discusses “fifteen tactical tools for effective risk management.” In other words, when you finish this book you should be in a good position to not only understand the problem that your company may face but also how to manage the issue going forward. After discussing how to optimize these tools for your business, she concludes with “the way forward” for companies.
For any senior manager, Board member, C-Suite executive or compliance practitioner this book should be mandatory reading. In this age of instant viral news, you do not want to be responding in an after-crisis mode. As the Wal-Mart and Avon FCPA scandals amply demonstrated, once bribes are paid, no amount of corporate cover-up or even burying negative reports will save a reputation. I heartily recommend this book for your bookshelf.
The Reputational Risk Handbook is available from Amazon here.
Thomas Fox is a contributing editor of the FCPA Blog. He’s the founder of the Houston-based boutique law firm tomfoxlaw.com. A popular speaker on compliance and risk-management topics, Fox is also the creator and writer of the widely followed FCPA Compliance and Ethics Blog. His book Lessons Learned on Compliance and Ethics topped Amazon’s bestseller list for international law. He can be contacted here.