Hurrell: Boards should act as if they’re in a greenhouse
Most organisations are far more transparent and open to scrutiny than they truly realise, leaving them vulnerable to reputational damage, Airmic CEO John Hurrell has said.
“The mentality that you are sitting in a highly-protected environment with lots of layers of compliance and protection around you is an illusory one,” Hurrell said, speaking in an interview with Business Reporter, a business supplement distributed with the Sunday Telegraph. “If boards behaved as if they were in a greenhouse, they would be actually much more cognisant of the risks, particularly reputational risk, ahead of time.”
Airmic is currently working with the Reputation Institute to tackle reputational risk, gain a better understanding of what drives reputation and develop a framework for a more objective approach to measuring it. If we can measure the financial value of reputation, Hurrell said in the interview, “we can then start to talk to the insurance industry about how they can underwrite the risk and at which point we help the people buying those policies to focus on different ways to manage the risks more effectively.”
Surveys of Airmic members have repeatedly shown reputation to be at or near the top of the concerns of risk managers, yet it is very complex to manage and there is currently little in the way of insurance cover. Hurrell explained that replacing a company’s physical assets is usually straight forward and often covered by insurance: “But will the public trust you afterwards?...It’s the reputational damage that kills you.”
John Hurrell