MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Ethics Scandal Wipes Out Another Professional Services Firm

C. HUYGENS - Friday, September 08, 2017
PR agency Bell Pottinger loses fight to retain clients and salvage its reputation; ethics scandal sends UK arm into administration.

“In a damning report, the Public Relations and Communications Association concluded that its messaging for the Guptas targeted wealthy white individuals and corporates in South Africa and was likely to inflame racial tensions. Since Monday, a host of big name clients and companies have sought to distance themselves from Bell Pottinger with HSBC, TalkTalk and Ascential joining luxury brands group Richemont and Investec in publicly abandoning the firm.”

Read more in Financial Times.

Financial Risk Body Armor Needed

C. HUYGENS - Sunday, August 27, 2017
Repeated blows to reputation will eventually cause the financial equivalent of dementia. For qualified companies and their leadership, reputation risk solutions can be life saving.

Read more in Risk & Insurance.

No Country for Old (Insurance) Captives

C. HUYGENS - Friday, August 25, 2017
Attention captives bearing reputation risk, review programs…implement immediate changes. Thus opined the court: Although

“…organized and regulated as an insurance company, paid the claims filed against it, and met the minimal capitalization requirements (but it)… was not operated like an insurance company, it issued policies with unclear and contradictory terms, and it charged wholly unreasonable premiums….(B)ased on the facts the court focused on, it will be vital for all captives to undergo a thorough review of their program, and to implement immediate changes”

Read more in Business Insurance.

Brexit and Sovereign Reputation Risk

C. HUYGENS - Friday, August 11, 2017
BDO, the global consultancy, tracked the valuation of businesses in the aftermath of BREXIT, when just over a year ago, on 23 June 2016, the UK decided 51.9% to 48.1% to leave the EU.

“Future performance may be significantly different given an environment of low exchange rates, growing inflation, and the possibility of continuing low GDP growth and falling consumer confidence.”

Read more in the BDO Blog.

Industry Under Siege (No, its not banking)

C. HUYGENS - Wednesday, August 09, 2017
“When commentators routinely compare Silicon Valley today with the arrogance, isolation and destructive might of Wall Street before the crash 10 years ago this week, it is time to start thinking about reputation — and what might ensue when the glamorous superficial allure of these tech giants wears off.”

Read more in the Financial Times.

Wells Fargo Drops Yet Another Shoe

C. HUYGENS - Friday, August 04, 2017
Reputation risk cost is often high because of losses initially not visible, like the submerged mass of an iceberg.

“Wells Fargo said that the number of fake bank accounts set up by its staff could be significantly higher than previously thought and warned investors that it risks further regulatory investigations into a new scandal over car insurance.”

Strategies to convince stakeholders there isn't an iceberg just below the surface—which will work as long as the assertion is true—include warranties on governance and related transparent financial products.

Read more in the Financial Times.

Venezuela's Reputation Risk

C. HUYGENS - Thursday, August 03, 2017
“Venezuela’s reputational risk isn’t going to get better. On the contrary, it’s only going to get worse….Western investors, already wary of ploughing money into one of the world’s most volatile countries, will be more reluctant to do so given the government’s increasing illegitimacy.”

Read more in the Financial Times.

Executives Become the Personification of Stakeholder Dissatisfaction

C. HUYGENS - Wednesday, July 26, 2017
"Whenever there’s a corporate misstep, stakeholders, from activist investors to customers to politicians, are giving public voice to their anger through social media, doing damage not only to corporate brands, but to individuals in corporate leadership positions.…The executives who are vilified during a crisis become the personification of stakeholder dissatisfaction. When they are targeted, the personal losses can be devastating."

Read more in the CEO World.

Doubt is the Face of Reputation Risk

C. HUYGENS - Thursday, July 20, 2017
In early July, international health insurance giant Bupa confirmed an employee had stolen data relating to 547,000 clients and was trying to sell it online. Reputation risk as a possible consequence of the cyber event.

“A cyber breach [including employee theft of computer data] does not necessarily damage an institution’s reputation,” Kossovsky said. “Reputation risk is the risk of leaving stakeholders disappointed and emotionally charged... (a)nd doubt, of course, is what reputation risk looks like.”

Read more in the Insurance Business.

Email Reputation Risk: Summer 2017 Edition

C. HUYGENS - Wednesday, July 19, 2017
Reputational risk is the risk of a verdict of culpability with prejudice and damages for emotional harm in the court of public opinion. The purpose of a reputation risk management strategy is to foster reputational resilience and a verdict of exculpation due to mitigating factors, according to Nir Kossovsky of Steel City Re.

“The entire notion of reputational risk is essentially a battle for the mind of the stakeholder. When a bad thing happens — as they always do — will the stakeholder say, ‘Yeah, that’s a bad thing, but it’s such a good company. It’s unfortunate, but they’re good people and they’ll recover.’  Or will they say ‘Yep, that’s what we expected. That’s a bad company and that’s one more thing we expected to come out of them.’”

Reputation risk management products such as insurances that behave like warranties help foster reputational resilience.

Read more in the Business Insurance.

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