A new report on Reputational Risk finds that innovators among professional services providers are helping clients grapple with what is essentially a subjective, perception-based problem
New York, NY - January 25th, 2023- New analysis from Law.com Compass Pacesetter Research, previously known as ALM Intelligence Pacesetter Research, has found that the number of reputational risk management-related services has continued to climb since the pandemic and the resulting global political and economic volatility, underscored by the rise of social media.Furthermore, stakeholders are increasingly holding organizations more accountable for their conduct.The service emphasis among innovators in professional services has moved toward a more proactive approach. This is achieved by incorporating reputation risk into a more holistic, enterprise-wide risk management strategy.
"Reputational risk, a risk grounded in perception, has involuntarily become a growing priority for organizations," said Ruth Sierra, Analyst, Law.com Compass Pacesetter Research. "Professional services providers are predominately remediation-focused, with only a limited number of Innovators offering strategic, proactive-focused approaches to reputational risk."
In addition to this proactive framework shift among innovative providers in risk management, key trends identified in this research include:
- The perceptual and ethical elements, coupled with the difficulty in objectively measuring them often reframe reputational risk as a secondary priority to crisis management
- A key challenge is few organizations have a reputational risk management team or chief reputational risk officer, so reputational risk management is fragmented and typically spread across multiple business units, with no one "owner"
- With key stakeholders (i.e., customers, NGOs) closely monitoring organizations' ESG efforts and some early government regulations, clients are finding themselves more actively thinking about reputational risk
- Organizations that build a fully integrated strategic plan around reputational risk are strengthening their brand resiliency
- While reputational risk is difficult to define and measure, all successful solutions rely heavily on advanced data analytical tools for key insights and monitoring, with a growing trend towards a centralized data platform
Organizations are finding that many factors can influence reputational risk, some of which clients may have no direct control over. As a result, the need to examine the full implications of reputational risk requires companies to be proactive learners who understand the full breadth of their reputational risk profiles and who utilize the aid of forward-looking strategic thinkers to help best navigate these risks. The end goal is to limit the organization's potential for reputation damage and foster long-term operational and brand resilience.
As detailed in the report, innovative professional services providers are most likely to try to instill a full reputational risk management framework that focuses on the needs of the client's key stakeholders. Innovators are more likely to leverage opportunities to showcase positive initiatives and actions, helping clients build long-term resiliency into their reputational risk framework. This puts the emphasis on reputational risk management in a broader strategic context for clients.
In Law.com Compass Pacesetter Research: Reputational Risk 2022, the Pacesetter Advisory Council assessed dozens of providers to arrive at eighteen Innovators recognized for their ability to deliver tangible client impact in today's crowded reputational risk market. Additionally, the research and analysis provide insights into the competitive dynamics and service delivery trends driving convergence across legal, management consulting, multi-service, communications/PR, and technology providers.
In this report, Law.com Compass Pacesetter Research evaluates the innovation in the reputational risk management capabilities and offerings of the following providers: Accenture, Allison+Partners, Benesch, Clifford Chance, CS&A International, Deloitte, EY, Fasken, FTI Consulting, Ketchum, KPMG, Marsh, McKinsey, Norton Rose Fulbright, Osler, PwC, Protiviti, and Rostrum.
Law.com Compass Pacesetter Research provides independent, objective research to providers and buyers of professional services, coupled with practical insights that inform decision-making processes.
To learn more about the reputational risk research or obtain the full version of the report, go to: https://www.alm.com/intelligence/pacesetter-research-2/reputational-risk/.
ALM is the most trusted media, information and intelligence company supporting both the practice of and business of professionals in the legal, insurance, commercial real estate and financial services industries. ALM delivers leading data, intelligence, insights, events and audiences essential for growing businesses globally to over 7 million professionals. Please visit alm.com for more information, and visit www.alm.com/events/ to learn about our upcoming events. Please follow us on Twitter at @ALMGlobal_.
Tags: Damage Control, Reputational Risk, Brand resiliency, ESG, Regulations, risk, Risk Management
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