The digital era has transformed though leadership for corporate reputation. The rise of big data has enabled analytical experts to put quantitative assessments on the 'currency' of reputation. This comes at a time when public trust is declining aided by an abundance of fake news; the reputation of any organisation communicating information is critical.
All organisations provide information, from government statistics, Facebook and financial advice to the press, product advertisements and NHS patient guidance. In the information age the list is endless. This paper explores the concept of reputational currency and the role that internal audit has in providing assurance over how organisations are proactively managing their reputation, and its value.
The Oxford dictionary defined reputation as ‘the beliefs or opinions that are generally held about someone or something’. This is the traditional Outside-in perspective, yet reputation is two-fold. It is also about what an organisation or person projects and tells others about themselves, the Inside-out perspective.
By considering both dimensions of reputation organisations can begin to understand the key drivers, measure them and increase their value.
Kasper Nielsen of the Reputation Institute (RI) said that ‘to understand reputation you need to make the intangible tangible. You need to break down your reputation into specific components that you can measure and manage.’
The RI has defined seven rational dimensions that sit around four emotional bonds that connect individuals to organisations. These are familiar topics for audit leaders and will be explored in more detail.
Their RepTrak model gathers data from a wide variety of sources (7000 companies, 55 countries, 20 industries), weights it against each dimension and uses machine learning to conduct detailed analysis to measure reputation. Focusing on lead indicators in each category it is possible to assign a value at risk (VaR) and proactively manage the…
"Next to doing the right thing, the most important thing is to let people know you are doing the right thing."
- John Rockerfeller