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Reputability are thought leaders in the field of reputational risk and its root causes, behavioural risk and organisational risk. Our book 'Rethinking Reputational Risk' received excellent reviews: see www.rethinkingreputationalrisk.com. Anthony Fitzsimmons, one of its authors, is an authority and accomplished speaker on reputational risks and their drivers. Reputability helps business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Monday, 15 July 2013

Reality Matters

Did the hapless “senior civil servant ” really spend more than £73,000.00 on his personal media training, in order to perform better in front of the Public Accounts Committee, as reported by The Times recently?

The simple absurdity of committing that much money to polish one’s skills for a professional meeting makes me wince.  But it also highlights a current and common over-reliance on  presentation,  design and marketing.

Of course, these are some of the business functions in which the UK is particularly skilled.  Our creative services are world class and their outputs improve our lives in many ways, both personal and professional.  But communications services cannot be cherry-picked to make organisations appear better. All business functions are not equivalent.  Outputs, sales, target must be set and met and companies must be run by boards which have an appropriate level of understanding of corporate activities.  It is astonishing then, that Reputability’s new research, “Deconstructing failure, Insights for boards”  shows that three of the main risk factors that lie at the root of most of the failures studied, are:   “Gaps in board skill-sets and the inability of the Board to influence Executives (88%)”, “inability of boards to engage with fundamental risks to the business (85%)” and, “Defective information flows to and from the Board (59%).  In the majority of the 41 corporate failures studied, Boards simply lacked important information that might have helped them  to prevent a catastrophe. 

Are  the business functions that supply timely, up-to-date and relevant information to Boards less well-developed than  those of their marketing and communications colleagues?    Or are there “glass ceilings” blocking valuable intelligence?  Or, as Margaret Heffernan, author of “Wilful Blindness”  contends that the biggest problems are often, “right in the public eye and require the active participation of hundreds, or sometimes thousands, of people”.  Or is it simply the cumulative inability of people to absorb information that contradicts their existing world view?

Whatever the cause, the post mortems of crises regularly expose a disconnect between corporate claims and corporate reality.   Boards need to be better aware of the quality and extent of their information, something no amount of media training can sort out.

Jane Howard
Reputability LLP

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