Chapter
Combining our insights to reveal
hidden truths
Outsiders can see more clearly than insiders
How is a good reputation valuable?
The unrecognized role of heuristics
The value of a good reputation
Whose reputation is it anyway?
03 How reputations are lost
Confidentiality evaporates in a crisis
Crises as a public stress-test of leaders
Stakeholders and media engage
Leaders are not necessarily trusted
As stories develop, reputations evolve
04 What is reputational
risk?
Cognitive biases and their consequences
How cognitive biases and heuristics
lead us astray
A better definition of reputational risk
Latent weaknesses incubate slowly
Turner’s innovative equation
Lessons from Three Mile Island
Complex systems fail in complex ways
Overconfidence and optimism
The problem of systemic weakness
Enter the Swiss cheese model
05 The hole in
classical risk management
Where ‘three lines of defence’ fails
The hole in classical risk management
The ‘Swiss cheese’ model has a hole!
Boards in the dark: unknown knowns and the risk glass ceiling
Unwanted incentives affect risk managers
Protecting chief risk officers
How does this work in practice?
Reputational capital and reputational equity
Stakeholders in peacetime
Insiders are stakeholders too
If stakeholders overestimate you
Stakeholders’ unreasonable expectations
Regulators: stakeholders with
multiple agendas
07 Risks from
failing to communicate
and learn
Upward communication failures
Downward communications failures
Communication across the organization
08 Character,
culture and
ethos
Failure to embed the desired culture throughout the organization
Financial incentives: bonuses
11 Board
composition,
skill, knowledge, experience and behaviour
Insufficient understanding
Blindness from cultural maps, rules, taxonomies and social norms
Diversity and skewed boards
Biases, heuristics, board dynamics and challenge
12 Risks from
strategy and change
Risks from large projects and change:
the planning fallacy
Risks from inadequate crisis strategy, planning, practice and management
13 Incubation and complacency
Incubation can be surprisingly long
14 The special
role – and risks –
of leaders
Leadership charisma and dominance
Who can risk-manage leaders?
15 BP: Texas City explosion
Findings of investigations
Findings of investigations
Findings of investigations
18 American International
Group (AIG)
Findings of investigations
20 Libor: Barclays Bank PLC
Brief note on the company
Findings of investigations
22 Mid Staffordshire NHS Foundation Trust (Stafford Hospital)
Brief note on the organization
Findings of investigations
Part Three Practicalities
Implementing a reputational risk management process
24 System basics – getting to ‘go’
Understanding the nature of reputation
and reputational risk
Assigning ownership of reputation
25 Setting up the reputational risk management system
Leadership in risk management
Giving the team sufficient authority
Dealing with risks from board level
26 Operating the reputational risk management system
Setting risk appetite and tolerance
Identifying, analysing and evaluating reputational risks and their roots
Analysing risks and impacts
Evaluating risks and impacts
Mitigating vulnerabilities
Rethinking Reputational Risk
：How to Manage the Risks that can Ruin Your Business, Your Reputation and You
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