Reputation risk is the possibility that adverse public perceptions damage an entity’s relationships, operations, value, or financial results. It is difficult to translate behavior and public reaction into a consistent risk rating because analysts may interpret the same evidence differently. section 7.5.3
Assess reputation risk by combining imperfect evidence sources:
- Compare the situation with similar historical cases and analyst judgments. section 7.5.3
- Analyze social media sentiment surrounding an incident or organization. section 7.5.3
- Examine speech transcripts, keywords, and political donations when leadership behavior may create broader systemic risk. section 7.5.3
A customer lawsuit becomes a reputation signal
A dissatisfied customer sues ACME after products fail to meet sales promises, and media coverage follows. Analysts might assess comparable cases or measure social media sentiment, but different analysts could reach different ratings. section 7.5.3
