What is meant by the term reputational loss?

What is meant by the term reputational loss?

Reputational damage is the loss to financial capital, social capital and/or market share resulting from damage to a firm’s reputation. This is often measured in lost revenue, increased operating, capital or regulatory costs, or destruction of shareholder value.

How do you quantify reputational losses?

We measure reputational losses by examining a firm’s stock price reaction to the announcement of a major operational loss event. If the firm’s market value declines by more than the announced loss amount, this is interpreted as a reputational loss.

What are the effects of reputational damage?

“(Reputational damage) harms client and investor trust, erodes your customer base and hinders sales. A poor reputation also correlates with increased costs for hiring and retention which degrades operating margins and prevents higher returns.

How do you use reputational?

He is prepared to accept the reputational risk. We are not considering the reputational issues. Companies should positively reward employees for highlighting wrongdoing that could cause financial and reputational damage. Experts said that its stance risked causing further reputational damage.

What is reputational risk examples?

Reputational risk is a hidden danger that can pose a threat to the survival of the biggest and best-run companies. For example, gas and oil companies have been increasingly targeted by activists because of the perceived damage to the environment caused by their extraction activities.

Is reputational a word?

REPUTATIONAL (adjective) definition and synonyms | Macmillan Dictionary.

Is reputational risk quantifiable?

However, it is difficult to quantify loss of reputation after such an event. The reputational loss model introduced in this paper proposes that post-accident changes in the market valuation of a company partially reflect a quantifiable loss of reputation.

How do you evaluate reputational risk?

Effectively managing reputational risk involves five steps: assessing your company’s reputation among stakeholders, evaluating your company’s real character, closing reputation-reality gaps, monitoring changing beliefs and expectations, and putting a senior executive below the CEO in charge.

What causes reputational risk?

Reputational risk can also arise from the actions of errant employees, such as egregious fraud or massive trading losses disclosed by some of the world’s biggest financial institutions. In an increasingly globalized environment, reputational risk can arise even in a peripheral region far away from home base.

How is reputational risk defined?

Reputational risk is a threat or danger to the good name or standing of a business or entity. Reputational risk can occur in the following ways: Directly, as the result of the actions of the company. Indirectly, due to the actions of an employee or employees.

What does Repetitional mean?

1. The act or process or an instance of repeating or being repeated. 2. A recitation or recital, especially of prepared or memorized material. [Middle English repeticioun, from Old French repeticion, from Latin repetītiō, repetītiōn-, from repetītus, past participle of repetere, to repeat; see repeat.]