How to Manage Emerging Reputational Risks in 2020

By: Jon Goldberg
Feb. 1, 2020
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For organizations of all sizes, the ability to identify, understand and manage an increasingly complex array of reputational threats will have an outsize effect on their performance in the years ahead.

The rise of AI technology, fake news as a weapon, a divisive political climate and a growing panoply of third-party perils are just a few of the factors contributing to the evolving reputational threats that companies will have to reckon with in 2020.

Having a well-thought-out, thoroughly tested plan in case of a crisis is essential, but in today’s world, being prepared is no longer enough. It’s now more crucial than ever to proactively assess vulnerabilities and create systems to intercept and neutralize issues before they become crises.

With that reality in mind, here are four emerging reputation risks to consider:

Targeted online attacks

As if threats of massive data breaches, technology outages or consumer-privacy rebellions aren’t worrisome enough, a new cause for cyber-insomnia looms: “reputation exploitation.”       

The phrase refers to targeted online attacks that employ realistic-looking content, fake-news sites and even AI-driven synthetic “influencers” to exploit an individual’s or an organization’s reputational soft spots.

Sponsors of such attacks can have a variety of agendas: to damage a competitor’s reputation and gain market share, drive down the value of a company’s stock, pressure a legal adversary into an unfavorable settlement, co-opt a popular brand to advance a political or ideological agenda, or even exact revenge on a former employer or spouse. 

Creating a steady flow of high-quality content that stakeholders want and search engine algorithms value will help inoculate Google search results against malicious manipulation. Indeed, proactively minimizing your organization’s reputational vulnerabilities and strengthening its online reputation are your best defense against reputation exploitation. 

Controversial statements

With the 2020 presidential election now in full swing, major corporations might find themselves in candidates’ sights as epitomes of what’s right or wrong in America. A single tweet or mention from a candidate could land a company in the spotlight, and not necessarily in a good way. 

Companies and executives who take stands on controversial issues or express support for individual candidates face especially high risks, as those candidates test positions and jockey to score political points with voters. The most innocuous mention by an influential political figure can spark a social media backlash against the organization, since the public is likely to infer a reciprocal endorsement.

Before taking stands on controversial issues, organizations should carefully weigh the benefits against the risks, and then plan accordingly. Risk assessment and planning should consider whether a company’s positions on hot-button issues align with its mission, values and business interests. Any divergence from those principles will quickly be pointed out on social media and elsewhere. 

Artificial intelligence

Sensors are being embedded in everything from cars and medical devices to toys and appliances, linked by increasingly complex and interdependent artificial intelligence algorithms. 

As AI continues to change the nature of work and how people shop, bank, travel and receive health care, the magnitude of risk the technology poses is projected to soon surpass that of natural disasters. 

Businesses, government bodies and major trade groups have yet to agree on a shared ethical, social and regulatory framework for artificial intelligence and AI-enabled devices. Organizations are a long way from fully understanding the scope of AI crises they might face, much less how those eventualities might impact their reputations and revenues.

As the world becomes more reliant on networks of smart, interconnected devices, the potential for an isolated failure or cyberattack to cascade into a global AI meltdown increases. 

Organizations should not wait to establish relevant plans and protocols. Best practices gleaned from planning for extreme weather events and widespread natural disasters are a good place to start.

Third-party threats 

Companies are being exposed to an array of new risks through their growing dependence on outside entities to supply them with products and services, together with more intense scrutiny of these relationships by regulators, media and the public. 

Consequently, executives and corporate boards are feeling a sense of urgency as they recognize that they are responsible for managing these new risks. They are accountable for any harm that may come to any stakeholders, and for the diminished trust in their organizations that might result from the actions or inaction of their third-party suppliers. 

For businesses, third-party relationships should be sources of strategic strength, not reputational weak links. Companies must choose their allies carefully, continually reassess their exposures to third-party hazards, and be ready to act quickly and decisively when issues arise. Otherwise, they might find themselves having to answer for legal, operational and reputational crises not of their own making. 


photo credit: @taskinhoo