Willis, a WTW business, (NASDAQ: WTW), today launched its reputational risk readiness survey 2024/25. Cyber risk, and particularly cyber-attacks, emerged as the main threat to reputation for 65% of the 500 global senior executives surveyed, up from 52% in 2023. This was closely followed by environmental concerns (64%, up from 52% in 2023). Governance (at 56%) and social impact (at 47%) are also up from 2023 (when they were 52% and 45% respectively), as regulations continue to tighten in many jurisdictions.
Other findings include:
- A majority of organisations would still accept a degree of reputational risk if they thought it was worth it. 57% of respondents said they would be willing to take on more risk if the activity or association is the right fit for the business. More than two-thirds (69%) say they assess such situations on a case-by-case basis.
- The vast majority of businesses (94%) have some level of reserved budget set aside to help deal with a damaging reputational event
- 64% of respondents admit their organisation has a “moderate” ability to model the financial impact of an event in advance, a downward trend from 74% in 2023 and 87% in 2022. Only 11% said they were able to model the financial implications with a “great deal” of capability, including understanding exposures from a severity and frequency perspective.
- 87% of organisations have a formal crisis response team in place guided by an established set of KPIs. 91% also carry out annual exercises to test their crisis communications plan.
David Bennett, head of reputational risk management, direct and facultative, at Willis, said: “The results of the survey show that while crisis response teams are more robust than ever, modeling capabilities still lag. In today’s unpredictable environment, the ability to anticipate and assess costs and liabilities is becoming increasingly critical.
“Reputation has long been viewed as intangible and difficult to quantify. However, embracing advances such as AI-powered platforms, enables organisations to monitor real-time sentiment and model the frequency, severity, and potential sources of reputational threats with greater precision than ever before.”
Garret Gaughan, managing director, direct and facultative, added: “Leading businesses are managing reputation as an operational and financial risk, and have moved away from viewing it as a branding exercise, with some even linking reputation to board KPIs. To build resilience, companies should develop strong risk management processes, including sentiment tracking and risk intelligence.”
The complete report can be downloaded here.