Reputational damage tops digital risks for businesses: Risk manager survey

The threat of reputational damage through social media is the greatest digital risk for businesses, according to a study of European risk managers.

The survey, released Sunday by the Brussels-based Federation of European Risk Management Assns. and the London-based Institute of Risk Management, asked risk managers to name the top three digital risks for business in general.

Almost half of respondents, 48.4%, cited reputational damage through social media as the top digital risk for businesses, while 46.8% cited theft of customer information and 43% cited malicious interference with information technology systems as a big risk facing businesses. No. 4 was nonmalicious operational IT risks, cited by 41.4% of respondents.

FERMA and the IRM surveyed 186 risk managers online during August and September.

The results, however, were different when risk managers were asked to name three risks that most concern their particular organization.

Nonmalicious operational IT risks were the biggest concern, cited by 51.4% of respondents. No. 2 was theft of customer information, cited by 42.7% of respondents. Reputational damage through social media was No. 3, cited by 42.2% of respondents.

Risk managers also were asked who in their company, in addition to IT security experts, is involved in managing cyber risks, and 83.6% said the risk management department also is involved in managing cyber risks.

Almost two-thirds, 65%, of risk managers surveyed said their company has a policy in place on employees' use of social media, while a further 14% said their company was in the process of implementing such a policy.

In a statement, Michel Dennery, vp of FERMA and deputy chief risk officer in the audit and risks division of Paris-based GDF-SUEZ, said he welcomed the involvement of risk managers in dealing with exposures from cyber risks and social media.

“Companies have to learn how to live in this new environment where information is available immediately anywhere, where private and professional life is merging and where the balance of authority is shifting,” he added. “Influential cities have always been located on important communication nodes. The Web provides a global and worldwide open city where companies must take risks for developing their business and preserving their know-how,” he said.