A new study of 132 Australian business leaders has found more concerned about the long-term impacts of their reputation, such as the erosion of brand equity.
Australian private and public organisations have become more sensitive to workplace risks and are working to identify reputational issues, according to a new report from law firm Norton Rose Fulbright.
Norton Rose Fulbright has conducted a study of 132 Australian business leaders. It found that leaders have become more concerned about the long-term impacts of their reputation, such as the erosion of brand equity.
The law firm says the Hayne Royal Commission has prompted companies to take stock of the potential damage caused by reputational scandals.
Long term reputational issues were cited as a bigger concern than short-term factors, such as the immediate costs and consequences. Business leaders placed more importance on long-term issues than they did two years ago.
Respondents also predicted ethics and conduct in the workplace would likely have the greatest impact on organisational reputation in the years to come.
Norton Rose Fulbright said the emphasis on long-term reputational impacts is “a sign that major organisations are now treating reputational risk as a long-term, strategic issue”. The law firm suggested responsibility for reputation “is being spread amongst more leadership roles and functions than just the chief executive”.
The firm believes “more organisations have established crisis management committees and protocols, and run regular risk training and audits”.
Norton Rose Fulbright head of employment and labour in Australia, Jason Noakes, said: “Our survey results clearly show a growing intensity of concern about workplace reputational issues, which reflects what we’re hearing from many of our clients. Major organisations are becoming both more sensitive to reputational risk and more willing to identify its key drivers.”
Australia-based independent risk consultant Eamonn Cunningham agreed with the study’s findings. He said companies should focus on the long-term damage caused by reputational scandals.
“These short term costs, essentially one-off expenses relating to, for example, crisis management, pale into insignificance compared to the diminution in capital value resulting from a mishandled response to a reputation issue.”
Cunningham said it was “extremely difficult to assess and measure” reputational issues in advance, but called on companies to “assess and attempt to measure it to the extent possible”.
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