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More than two-thirds (67%) of global executives fear that their companies’ reputations are at risk of being compromised by online activities – including leaked information and employee sabotage -? but many still underestimate the magnitude of these threats, according to a survey from Weber Shandwick and the Economist Intelligence Unit (EIU).

The survey, “Risky Business: Reputations Online” found that online reputation management (ORM) has now made it to the top of leadership agendas as execs become increasingly aware of the challenges posed by? digital communications. Nearly 6 out of 10 global executives say their companies are now rigorous about online reputation management and expect to be more rigorous three years from now.

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Despite this increased focus, the survey found that a majority of leaders are still out of touch with their employees online, even though employee criticism (41%) tied for first place with leaked confidential information as the greatest online reputation risk to a company’s reputation.

Employee Sabotage

Two-thirds (66%) of global executives are either unaware or do not want to admit that employees are badmouthing their companies online, while only one-third (34% ) of executives worldwide say they know of an employee who posted something negative online about their company despite the ongoing prevalence of damaging digital chatter.

In addition to global executives’ lack of knowledge about their employees chatting online about work and their company, the research also revealed that far fewer global CEOs/chairmen are concerned than non-CEOs/chairmen (21% vs. 43%, respectively) about employee work-related discussions on social networking sites, video-sharing sites and employee grievance sites.

“Leaders’ short-sightedness about employees going online to complain about their bosses, discuss salaries and leak confidential information highlights one of the most dangerous threats to corporate and professional reputations now and in the years ahead,” said Dr. Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick.

Loose E-mails

Fully 87% of global executives admit to having erroneously sent or received at least one electronic message (private e-mail, text or Twitter), while 80% of CEOs/chairs have mistakenly sent or received electronic messages themselves. The unintended and unexpected consequences of misdirected electronic messages can taint, sometimes permanently, company reputations in seconds, said Weber Shandwick.

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“Risks that did not exist a decade ago are now on full display – internal e-mails going astray, negative online campaigns by dissatisfied customers, and online grumblings from disenchanted employees, bloggers and anyone else who has an opinion to voice,” Gaines-Ross said.

Sustaining Reputation Online

When asked about the effectiveness of the internet as a resource for judging reputation, global executives reported that the best uses of the internet are for investigating business rivals (64%) and partners (60%), capturing customer feedback (63%) and exploring new employment opportunities (60%).

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On the other hand, global executives are less likely to find the internet useful for assessing corporate responsibility track records, charitable organizations and activist groups or NGOs.

Mistrust of Blogs

By far, the greatest perceived cause of overall reputation damage is negative media coverage (84%), the survey found.

However, the majority of executives believe that traditional media, vs. online and social media, plays a larger role in shaping corporate reputation. Specifically, global executives believe that only half of information in corporate blogs is accurate and only 14% of execs trust them as a good source for assessing reputation.

Moreover, global executives believe that the least effective way to protect corporate reputation online is to build relationships with influential bloggers. Only 10% consider this strategy helpful in keeping reputations secure.

About the survey: Risky Business was conducted among 703 senior executives in 62 countries spanning North America, Europe, Asia Pacific and other markets. The survey was conducted online in June and July 2008. Weber Shandwick will be following up on this initial release of Risky Business survey results with additional reports that will focus on select segments such as executive rank, geographic region and age. Other segments will include business-to-business vs. business-to-consumer companies, and privately vs. publicly held enterprises.

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