Although reputational risks are becoming a front-of-mind concern for corporate executives, implementing strategies to minimize those risks is lagging, experts say.

Managing a company's reputation has become a far more complex task in the past 30 years, panelists said during Business Insurance's recent webinar, “Crisis of Confidence: How to Protect Your Company's Reputation from Damage.”

Changing dynamics in media, rapidly advancing information technology and expanding public expectations of transparency have drastically compounded the extent to which a public relations crisis can damage a company's brand and image, panelists said.

“It's a vastly different world. Companies find themselves under a brighter spotlight and are forced to act more quickly in response to a crisis than they might have been 30 years ago,” said Chris Gidez, global energy practice leader at New York-based Hill+Knowlton Strategies Ltd.

“The advent of the Internet has created a lot of chaos for companies, for the media, for the consuming public and the investing public,” Mr. Gidez said. “I'm not sure the number of crises has increased, but certainly the number of them that have been brought to the media's attention has increased.”

Despite the mounting frequency and complexity of reputational crises gaining media attention, panelists said companies have been slow to incorporate sufficient mitigation and response strategies into their broader risk management programs.

“Reputational risk really does seem to be top of mind, and we see it across our client base, regardless of the size of the corporation, their sector, geography, regulatory or competitive environment or their ownership,” said Laurie Champion, an Atlanta-based managing director of Aon Global Risk Consulting's enterprise risk management practice. “But it's not that often that we hear about the actual management of reputation risk.”

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Crisis communication planning and reputation management strategies are crucially important, panelists said, but cannot be developed in a vacuum. Reputational risk management is most effective when incorporated into broader enterprise risk management programs, as well as a company's day-to-day operations.

“A robust crisis management program looks beyond physical risks and supply chain and other issues, and looks to the broad management of risk overall,” said Larry Walsh, vice chairman of the Alexandria, Va.-based Hawthorn Group L.C. “It's not an add-on. It needs to be something that the senior management is interested in and that the board of directors is involved with.”

To improve the quality of their preparation for and response to a reputation-threatening event, panelists suggested that risk managers and senior executives test their crisis management plans for companywide awareness of the complexity of reputational risk.

Additionally, senior executives and operational leaders should work together to reach an agreement on pre- and post-event strategies to manage reputational risk and align their priorities to execute those strategies through resource allocation and oversight.

“When we look at companies that are above average on the risk maturity curve and ask about how risk management is communicated to the organization and whether that information is used to improve understanding the complexity of risk and its impact on reputational performance, 92% tell us that they do this on a regular basis,” Ms. Champion said.

Business Insurance Senior Editor Rodd Zolkos moderated the webinar.