Reputational risk is at the forefront of this change, Murdoch says. “Reputational risk is now much more important because of the pace.
”The pace means that if you’ve got a reputational risk, it’s on social media within minutes. And that’s something that the organisation’s risk function is going to have to learn how to deal with, as well.”
Matt Tottenham, director, audit, assurance and risk consulting at KPMG, says social media has brought with it the additional risk of losing control over the narrative – unless they are very alert and ready to respond.
“You just have no control over the messaging anymore once it gets into the public domain. And it’s there in seconds – potentially very large reputational risk.”
Traditionally, when the risk function has mapped its risks, the two axes have been about likelihood of the risk occurring, and the dollar impact, but preparedness to respond is now a critical element.
“A reputational risk can be only a small financial outcome but a disastrous reputation outcome. These are the things that good risk people are able to bring some clarity to,” says Sally Herman, a non-executive director at Suncorp Group Limited, Breville Group…
