Managing reputation risk in 7 steps

  • Every charity and social organisation faces a unique set of reputational challenges
  • However, there are certain principles for building and preserving a reputation that are common to every type of organisation
  • Here, we discuss the seven building blocks of reputation risk management

We live in an age where a good reputation – built over years or even decades – can be tarnished in an instant.

In the charitable sector, you only have to consider the impact of the recent sexual harassment scandal involving Oxfam, which led to 7,000 regular donors withdrawing their support for the charity in the immediate aftermath.

No charity or social organisation can ever be immune from reputational damage, but by understanding the seven building blocks of reputation risk management, you can help to reduce the risk of incidents occurring that could jeopardise the reputation of your organisation.

1. Leadership and management

One of the most important things to understand about reputation risk is that it cannot be eliminated entirely. Organisations that provide care and support to vulnerable individuals, for example, or those that work in politically volatile countries, must accept a degree of risk in order to be able to provide a meaningful service to their users.

Matt Hillyer, Senior Strategic Risk Consultant, Zurich, says: “Leaders and managers have a crucial role in establishing their organisation’s risk appetite ­– the level of risk they are prepared to accept in order to deliver on their organisation’s vision and strategy, and to pursue new opportunities – and in ensuring this risk appetite is clearly communicated to all employees.

“Leaders and managers also have an important role in identifying risks that could impact on the organisation as a whole, and ensuring these risks are addressed at the most senior level within the organisation.”

2. Stakeholder engagement

In order to understand the needs and expectations of different stakeholder groups – from employees, donors, service users and suppliers at a primary level, to regulators, the media and the wider community at a secondary level – organisations must first ensure they have identified and mapped all these different stakeholders.

“Once you have done that,” says Matt, “you should consider what the drivers of reputation are for each group of stakeholders, so you can better understand how different reputational risks might be perceived by each group.

3. Quality management

Quality management is about the steps organisations take to proactively manage their reputation, for example, how they monitor and measure their online reputation.

“Supply chain is another important area here,” says Matt. “Organisations need to consider how an incident involving a supplier, such as a serious data breach, or an offence under the Modern Slavery Act, could affect their own reputation.

“Quality management is also about making sure that if you do suffer an incident that threatens your reputation, you have controls in place that will help to avoid a repeat occurrence.”

4. Employees

Any event that threatens the reputation of an organisation will also affect workplace morale.

And, says Matt: “If your reputation is badly damaged, your best employees are unlikely to want to stay.”

Your employees have a crucial role to play in building and protecting your organisation’s reputation, which means it is important to provide them with relevant, regular and appropriate training to do their job effectively, particularly if their role relates to safeguarding and the care of vulnerable people.

“It’s also important to have clear procedures in place for whistleblowing, and an open reporting culture that staff have confidence in,” says Matt. We have previously published a guide to some of the key principles of whistleblowing.

5. Corporate sustainability and responsibility

Corporate sustainability has gained a higher profile across the public and voluntary sectors in recent years. Organisations are increasingly aware of the importance of being able to demonstrate the positive contribution they make to society.

Matt says: “Corporate sustainability and responsibility is about having a clear mission, and values that are supported and understood throughout the organisation. It’s also important these values are in evidence throughout your supply chain, as negative publicity about a supplier could reflect badly on your own organisation.”

6. Incident management and communication

Should an incident occur that has the potential to cause reputational damage, it is important you are able to call upon a well-rehearsed crisis communications plan. Such a plan should identify the range of potential incidents that could cause reputational damage, and the internal stakeholders who would be responsible for dealing with communications.

“Organisations will face a lot of scrutiny in the immediate aftermath of a crisis event,” says Matt. “It’s important to be able to get your messages out in a controlled way, while at the same time being open and honest. You can only do this if you have clear procedures for incident management that are understood throughout the organisation.”

In a previous News and Views article, we identified five key components of incident management.

7. Governance

Governance is the final line of defence for a charity or social organisation – it’s what ties together the other six elements outlined above.

Good governance is about ensuring trustees understand their roles and responsibilities, and removing any barriers that could make it harder for your organisation to achieve its objectives.

Our previous News and Views article – 3 steps to good charity governance – contains useful tips on how to approach the issue of governance.

Sharing our expertise on reputation best practice

“As expectations for higher standards of conduct from not-for-profit organisations harden – from service users, communities and employees alike – the topic of reputation management is an important one for all organisations to be giving due consideration to,” says Gordon Wilmott, Head of Charities, Social Organisations and Health, Zurich Municipal.

“At Zurich, we are committed to promoting best practice on approaches to managing the risks, and to sharing our experiences in supporting the sector and providing tailored advice to organisations as required.

“This article helps outline a framework that any organisation can adopt to help understand and manage their reputation risks.”