Reputational risk
Reputational risk is the possibility that adverse perceptions of an organisation will damage trust, relationships or its ability to achieve objectives. It may follow actual misconduct, poor performance, misleading communication or an unfounded allegation. Effective management addresses underlying conduct and reliable information, not merely favourable publicity.
Worked example
A product-safety failure causes customers and distributors to lose confidence. Correcting the defect and communicating honestly matter more than an advertising campaign that ignores the problem.
Common mistake
Treating reputation as a communications issue alone or assuming all criticism is unfounded and should be suppressed.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Supporting | September 2026–June 2027 |