‘All risk is reputation risk’
In most organizations, the risk team monitors business threats in one corner while the communications team manages brand reputation in another. But this separation creates a critical blind spot, as reputation risk doesn't fit neatly into either silo. It belongs at the intersection of both.
Behind every enterprise risk lurks a secondary threat: reputation risk. As that emerging risk matures and is realized, every enterprise-level risk becomes a threat to a company’s reputation, affecting its finances, operations, brand value, and more.
Reputation risk is a material enterprise risk that needs to be included in your risk management strategy. As Renee Murphy, industry analyst in Governance, Risk & Compliance, explained during Signal AI's recent webinar: "80% of what's already in your risk registry has a reputational impact. And if you are not tracking that, you are missing 80% of your problem."
Workflow Gaps: The Two-Team Problem
Traditional ERM workflows create dangerous handoff points. The risk team identifies an emerging threat, documents it in the registry, and then passes it to communications when it becomes public-facing. By then, it's often too late for proactive reputation management.
First, there's a risk event, like a lightning strike. Then comes the wildfire. The initial risk is the ERM team's domain—a compliance breach, operational failure, or governance issue. The wildfire is where reputational damage spreads. A proactive mitigation plan requires both teams to work in tandem from the start.
The challenge:
- Executives often lack early visibility into emerging crises
- The traditional approach is reactive, fragmented, and anecdotal
- Communications, responsible for reputation management, and enterprise risk teams don't share data or tools for managing reputation risks.
For example, Boeing's cascading reputation crises in 2024 demonstrate what happens when communications enters too late. What began as a product safety issue evolved into operational, employee activism, and governance risks—each stage inflicting fresh reputational wounds. Had risk and communications collaborated from the initial lightning strike, the narrative might have been contained before it became a blaze.
Why We Should Bridge the Reputation-Risk Intelligence Gap
The disconnect often stems from different data sources and what Murphy refers to as missing context: “Everyone’s in a silo, figuring things out in their own context. Only when we get to enterprise risk management does that get leveled out and weighted and managed in a way where the organization can make a decision about the whole organization.”
Risk teams focus on internal metrics, compliance reports, and financial indicators. Communications teams monitor media coverage, social sentiment, and brand perception. Neither has the complete picture.
It’s not just about identifying risks but understanding the context they’re in, what the impact can be, and how deep that impact can be to the organization. That’s why Murphy argues for shared reputation and risk intelligence:
- Reduces siloed reporting
- Provides leadership with a holistic view
- Aligns reputation with enterprise objectives
Tara Lynch, Director of Product, Risk, at Signal AI, made this point: "If you’re working off the same information, you can communicate, you can work cross-functionally. You don’t have to work in silos, and you can be much more effective… Let’s identify a risk really quickly. Let’s have the risk team be really engaged, and then let’s have them reach out and engage with their comms team in a proactive manner."
This means risk teams need access to external signals—not just to understand emerging threats, but to quantify their reputational velocity and exposure. How fast is negative sentiment spreading? Which stakeholder groups are most affected? What's the threshold before this moves from manageable to critical?
Conversely, communications teams need visibility into the risk registry. "The mitigation strategies that are already in your risk registry have nothing to do with reputation," Murphy points out. "It has everything to do with minimizing the financial downside. It has nothing to do with reputation, and the reputation is the bigger financial downside."
Where Reputation Fits into ERM: Practical Integration Points
So where exactly does reputation risk fit into ERM programs? Renee Murphy and Tara Lynch offer a clear framework:
- Monitor & Identify: Track the emerging risks your company should monitor, prioritize, and mitigate. Risk teams should work to map reputation risks to ERM categories.
- Evaluate & Report: Explore, categorize, and assess the top risk issues that drove the most negative impact during the reporting period. Include reputation signals in risk heatmaps and shared dashboards, such as negative sentiment trends, daily media mentions, weekly ESG controversy monitoring, and real-time social sentiment shifts.
- Collaborate & Compare: Compare your risk profile vs. competitors and identify opportunities and threats across your peer set. Murphy emphasizes that "definitely engage stakeholders proactively and maintain transparency. You want to build trust, foster collaboration, and keep all the parties informed of risks and responses." Implement rapid-response communications to ensure timely, clear, and coordinated messaging during crises.
The Bottom Line
Reputation risk requires proactive measurement & integration into ERM programs to reduce enterprise and brand exposure
This isn't only about risk mitigation—it's about opportunity. When both teams share intelligence, they can identify and amplify positive narratives. They can identify competitors' reputational vulnerabilities as strategic openings.
"I'm not here to take less risk. I'm here to take more risk," Murphy insists. "And if that's an opportunity that allows us to reduce the downside... this isn't just reactive data, this is proactive data."
The question isn't whether reputation risk belongs in ERM—it's already woven through every entry in your risk registry. The real question is whether your risk and communications teams are equipped to collaborate and act before the lightning strike becomes a wildfire.