Reputational risk

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Reputational risk, often called reputation risk, is a risk of loss resulting from damages to a firm's reputation, in lost revenue or destruction of shareholder value, even if the company is not found guilty of a crime. Reputational risk can be a matter of corporate trust, but serves also as a tool in crisis prevention.[1]

This type of risk can be informational in nature that may be difficult to realize financially. Extreme cases may even lead to bankruptcy (as in the case of Arthur Andersen). Recent examples of companies include: Toyota, Goldman Sachs, Oracle Corporation, NatWest and BP. The reputational risk may not always be the company's fault as per the case of the Tylenol cyanide panic after seven people died in 1982.[2]

See also

References

Reputational Risk and IT in 2013-http://www-935.ibm.com/services/us/gbs/bus/html/risk_study.html

  1. ↑ http://www.ffiec.gov/ffiecinfobase/booklets/retail/retail_03b.html
  2. ↑ http://www.time.com/time/magazine/article/0,9171,960693,00.html

External links

http://www-935.ibm.com/services/us/gbs/bus/html/risk_study.html

Categories
Credit risk
Market risk
Liquidity risk
Operational risk
Financial risk modeling
Basic concepts
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