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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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.

Reputation Crises Experienced Personally

C. HUYGENS - Thursday, June 29, 2017
“When reputational crises hit, market cap, sales, margins and profits are all on the line…but it’s not only the corporate entity that faces challenges – individuals in leadership, particularly CEOs, face personal risk as well.”

Read more in the Property Casualty 360.

Wells Fargo: Regulators and Litigators Want Board Member Scalps

C. HUYGENS - Thursday, June 22, 2017
Regulators and litigators want board member scalps--Buffet may be outgunned. The reputation crisis at Wells Fargo now enters the regulatory phase, which by Steel City Re's metrics, is typically a very costly process.

"I urge you to exercise your legal authority to remove the holdover Wells Fargo Board members. Federal Reserve regulations and guidance impose clear risk-management obligations on the Board — obligations that are quite demanding for a bank as large and complex as Wells Fargo," Warren wrote. "The Board did nothing to stop rampant misconduct in the Community Bank that resulted in more than 5000 bank employees creating more than two million fake accounts over four years."

Read more in Business Insider.

Board Allowed Long-lasting Reputational Damage to Wells Fargo

C. HUYGENS - Wednesday, June 21, 2017
Senator Warren, writing to the Fed demanding the removal of all 12 directors of Wells Fargo…

…argues in the letter that the directors failed in their risk-management obligations, resulting in "massive financial losses" and "long-lasting reputational damage to the bank that has eroded the bank's customer base."

Read more in the Business Insider.

Another CEO Head, This Time Deservedly, Handed to God(s) of Reputation

C. HUYGENS - Wednesday, June 21, 2017
From the man who noted last week that Uber was suffering from a “reputational deficit”.

“There will be many pages in the history books devoted to [Travis Kalanick],” wrote Bill Gurley, an Uber board member representing one of the firms that demanded Mr Kalanick’s resignation, in a tweet. “Very few entrepreneurs have had such a lasting impact on the world.”

Read more in the Financial Times.

Measure of the Reputation Crisis at Uber

C. HUYGENS - Monday, June 19, 2017
Cornerstones of #reputation—ethics and security— and weaponized social media exacerbate #risk per Steel City Re.

Uber’s annual growth in the US slowed to 40 per cent at the end of May, from 55 per cent in the previous year, according to the data from Second Measure.

An onslaught by San Francisco-based Lyft, is taking its toll, with Uber’s US market share dropping from 84 per cent at the beginning of this year to 77 per cent at the end of May, according to data from Second Measure, a research firm that uses anonymised credit card data.

Uber’s decline in market share was fuelled by the #DeleteUber campaign at the end of January, which encouraged users to stop using the company due to Mr Kalanick’s role on President Donald Trump’s business advisory council. The campaign hit hardest in New York, Boston and San Francisco, some of Uber’s top 10 US markets.

Read more in the Financial Times.

CEO’s Toxic Wake Creates Reputational Deficit

C. HUYGENS - Wednesday, June 14, 2017
As Uber’s board was wrestling with core governance issues arising from its sexist environment as detailed in a commissioned report, board member David Bonderman directed s sexist comment at board member Arianna Huffington.

Ms Huffington laughed awkwardly and said it would be his turn to talk soon. After the meeting, Mr Bonderman emailed Uber employees to apologise — and later announced he was resigning from the board.

“We are in a reputational deficit,” admitted board member Bill Gurley. “It is going to take us a while to get out of this.”

Read more in the Financial Times.

Reputational Value Rarely Enhanced by Crises

C. HUYGENS - Sunday, May 21, 2017
Avoid #reputational #risk: manage stakeholder expectations, execute to expectations, and pre-position goodwill through 3rd-party validation of governance, risk and compliance excellence.

The half-life of corporate crises has undeniably shortened, helped by social media. Just ask Oscar Munoz, United Continental’s chief executive, how much time he had to react to an online video of a passenger being dragged off one of his airline’s flights in April. At the same time, crisis management specialists have an interest in fostering a nervous sense of constant uncertainty.

Such uncertainty cross-pollinates with the contagious concept of “never-ending disruption” and the alluring idea that all challenges are opportunities. Soon, managers assume they must foment a sense of crisis to get anything done. They are almost always wrong.


Read more from the Financial Times:

Activists Seek to Exploit Misplaced Expectations

C. HUYGENS - Thursday, May 18, 2017
A tsunami of emotionally charged disappointed stakeholders expected: #reputation #risk looks like this.

In a letter to investors earlier this month, explaining why they were opening to new capital, Mr Singer said he believes “that there has never been a larger (and more undeserved) spirit of financial market complacency in our experience”.


Read more from the Financial Times:

Activist Investors Have a New Bloodlust: CEOs

C. HUYGENS - Wednesday, May 17, 2017
Emotionally charged disappointed activist investors existential threat to CEOs as #reputation #risk roars through the boardroom and into the corner office. Culpability insurance is in limited supply and demand is growing.

Activist investors, a perennial nuisance for chief executives, are becoming an existential threat. Since January, they have helped push out the leaders of three high-profile S&P 500 companies: insurance giant American International Group Inc., railroad CSX Corp. and aerospace-parts maker Arconic Inc. They are gunning for the CEOs at other companies including Buffalo Wild Wings Inc. and Avon Products Inc.


Read more in the Wall Street Journal.

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