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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Equifax Loses Trust, Reputation, and Revenue

C. HUYGENS - Friday, November 10, 2017
The going forward costs of reputation risk include lost revenues and extraordinary operational expenses.
“Nervous corporate clients are putting off signing new contracts until Equifax can assure them its systems are secure. Several have demanded IT audits. ‘We're hoping to win back their trust,’” said CFO John Gamble

Read more in Financial Times.

Read more on Trust.

Reputation Loss Can Feel Like A Death

C. HUYGENS - Thursday, November 09, 2017
Reputation is a vital aspect of our public selves. “Reputation is an instrument of moral justice, sharpened by mass communication — a dangerously double-edged one, open to misuse and misappropriation…”

Read more in Financial Times.

Read more on Reputation

Wells Fargo: Another Damning Report

C. HUYGENS - Sunday, October 22, 2017
The latest blow to the reputation of Wells Fargo, #reputation #risk. OCC issues report on the bank's improper auto insurance practices...problem surfaced in July, after The New York Times obtained an internal report prepared for the bank’s executives.

“The comptroller’s findings …could force the bank to curb, or at least more closely monitor, its practices across the entire company. ”

Read more in New York Times.

Read more on current poster child for reputation risk, Wells Fargo

Reputation Value Collapses as Trust Falls to Zero at Kobe Steel

C. HUYGENS - Thursday, October 12, 2017
#Reputation #risk at Kobe Steel over quality. In 48 hours, 40% equity fall; 500% credit default swap rise.

“…according to Atsushi Yamaguchi, an analyst with SMBC Nikko Securities…if it fails to demonstrate change in its corporate structure, Kobe Steel risks an exodus of customers and investors over the longer term’ he said.”

Read more in Financial Times.

More on reputation risk and quality.

Reputation Risk of Association

C. HUYGENS - Wednesday, October 04, 2017
Details of the network of relationships that has ensared both McKinsey and KPMG, and fostered the demise of Bell Pottinger show signs of risk management but insufficient risk mitigation.

"I view Eskom’s lying about its relationship with McKinsey and Trillian as an assault on our democracy," Public Enterprises Minister Lynne Brown said in Cape Town on Wednesday. "If the truth had been told first, then the investigation into the contracts could have been far advanced at this stage."


Read more in Bloomberg

Click here for more on McKinsey

Further Evidencing the Value of Reputation Risk Mitigation

C. HUYGENS - Friday, September 29, 2017
Reputation risk costs mount. One CEO, six directors, 95% of directors' compensation etc. etc. Better to create value with an ethical story stakeholders understand and is completely credible. Reputation Assurance by Steel City Re, described as a warranty on governance, should be part of that story. More on VW: http://www.iafinance.org/mission-intangible?TagID=292804

"The costs of fixing and repurchasing diesel cars in the US had been unexpectedly high, VW said on Friday, sending its shares down almost 3 per cent. The diesel scandal, in which VW has admitted installing software to cheat emissions tests in up to 11m cars worldwide, has already cost the carmaker up to $24bn."


Read more in Financial Times

Fleeing Clients Indicate Reputational Damage

C. HUYGENS - Wednesday, September 20, 2017
KPMG and McKinsey have scrambled to limit the damage caused by their links to the Gupta family, which is at the center of South Africa’s worst political scandal since the apartheid era.

“KPMG on Tuesday lost two further audit contracts in South Africa and faced widespread reviews as clients sought to distance themselves from reputational damage from their links to the firm. McKinsey faced allegations of fraud and collusion in corruption from South Africa’s main opposition party over the management consultant’s work with a company linked to the Guptas, the family accused of corrupting state contracts through ties to President Jacob Zuma.”

Read more in Financial Times.

Peak Bloodlust: Now it's McKinsey

C. HUYGENS - Wednesday, September 13, 2017
Activists target McKinsey over South African ethics issues. The scandal surrounding the country’s controversial Gupta business family that destroyed UK PR firm Bell Pottinger and is brushing against KPMG continues to spread to international firms.:

“Corruption Watch, a non-government organisation in South Africa, said it plans to approach anti-bribery prosecutors at the US Department of Justice within the next two weeks to ask them to investigate McKinsey’s work with Gupta-linked entities.”

Read more in Financial Times.

Smelling Blood, Activists Target Another Professional Services Firm

C. HUYGENS - Tuesday, September 12, 2017
Activists target KPMG over South African ethics issues. Response:

“We’re determined to rebuild the public’s trust in KPMG’s South African firm, and will stand behind the firm and will work with it for as long as it takes…”

Read more in Financial Times.

Fund Reputation For Sexual Harassment A Liability

C. HUYGENS - Monday, September 11, 2017
Investors seek to avoid funds whose GP’s sexually harass prospect & portfolio company executives.

"The Institutional Limited Partners Association is aiming to help investors avoid funds where this has taken place, with improved detection of any past harassment incidents during the due diligence process."

Read more in Financial Times.

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