Asked which of a list of risk areas have the most impact on their business strategies, 40% of global respondents to a Deloitte survey cited reputation, making it their leading concern ahead of threats to their business models (32%), economic trends (27%), and competition (also at 27%). Those are the views of more than 300 C-level executives, board members and specialized risk executives at large companies, with reputation overtaking brand, 2010’s leading risk. Social media is fueling the concern over reputation, according to the study’s authors.
That’s because reputations that take great efforts to build can be quickly challenged by social media mentions, leaving companies at a far greater risk than ever of losing control of the conversation.
This is not the first study – and will likely not be the last – to examine social media from a risk perspective.Â A study released earlier this year by McKinsey indicated that 95% of global business leaders recognize some form of risk in their use of social technology, ranging from the increased risk of confidential information being leaked, to the risk of employees posting content on external sites that could affect the company’s reputation.
And in a study released last year by the Altimeter Group that surveyed social media risk professionals, roughly two-thirds saw social media presenting a critical (35%) or significant (31%) risk to companies’ reputations.
Interestingly, an MIT survey found many global executives to be using social tools to manage risks to their reputation,Â revealing that 75% of respondents believe thatÂ social is important forÂ managing brand and reputation risk.
52% of respondents to the Deloitte survey are managing their strategic risks byÂ increasing the frequency and budget for monitoring and managing risks, while 43% have started to monitor and manage the area continually, and 38% have increased the number of executives assigned to the area.
There’s still work to be done, though, according to a recent study from Grant Thornton, which suggested that while most companies believe social’s risks are avoidable, few are actively assessing them.
About the Data: The findings in the Deloitte report are based on a global survey conducted in the spring of 2013 by Forbes Insights. It includes insights from more than 300 respondents from the Americas (33%), Europe/Middle East/Africa (33%), and Asia/Pacific (34%). Nearly all respondents were C-level executives (263), board members (22) or specialized risk executives (21). Surveyed companies came from all five major industry sectors (consumer/industrial products, life sciences/healthcare, technology/media/telecommunications, energy/resources and financial services), and all had annual revenues in excess of US$1 billion (or equivalent).