A Committee Approach to Managing Reputation

Organisations have a number of options available to them when trying to enhance, sustain and protect their reputation. They can either have a Reputation Risk Committee or an Operational Risk Committee or both as follows:

1. Run a separate Reputation Risk Management Committee. Typical attendees should include PR, Communication, Corporate & Public Affairs, Advertising & Marketing, Brand Management, Regulatory Affairs, Safety, Health & Environment, Internal Audit, Risk Management, HR and Compliance function members.

The focus of this Committee is to discuss opportunities for building & sustaining reputation as well as to discuss reputation management and reputational risk issues. Each individual/department is required to supply a report of all reputational incidents / issues and opportunities and actions taken for building reputation. The minutes and reports of this meeting should go to the Operational Risk Committee.

2. Secondly, Reputation Risk should serve as part of a traditional Operational Risk Committee (ORC). This Committee normally comprises of all heads of departments in operations of a company. It meets on a fixed frequency to discuss risk issues - which are defined as operational issues / losses above a cut off limit/level. Each individual/department is required to supply a report of all Operational Loss Incidents / Issues to the Secretary/convener of the ORC. At this meeting each of these reports are discussed in detail by the ORC and analysed to help introduce necessary changes that would help prevent repeats of such - and save losses. Normally, an ORC is a recommendatory body - and the minutes of the ORC meetings are summarized and put up for approvals by top Management / Management Committee / Board of Directors.

In my opinion both of these approaches is necessary in a company. The focus of the RRC is to build, sustain and protect reputation whilst the ORC includes all types of risk and is useful for all attendees to see how various risks interact and can ultimately create reputational damage. In South Africa these two approaches will be in accordance with the recommendations of the King 2 Report on Corporate Governance.

The key for the success of these committees is to ensure that they do not become simple "report analyzing mechanisms" – but that they focus on and identifying and addressing loss / risk issues.

I recommend that all companies make these committees or forums mandatory.