With all the serious issues that boards have to contend with, one that often doesn’t get enough attention is risk management for the company’s reputation. Social media outlets are part of the company’s growth strategy and reputation monitoring should accompany it. Reputations are fragile. It takes just one negative comment that goes viral virtually overnight to destroy a company’s reputation.
It’s not that most corporations aren’t aware of this level of risk. It’s more that they haven’t set up the best structure to monitor the company’s reputation. While the board is ultimately responsible for the company’s reputation, often, there is no single person in the company who has the accountability for reputation risk, let alone the authority to take responsible action to mitigate reputational risk. Board directors, the CEO and committee members aren’t going to be monitoring the company’s social media accounts every day looking for signs of trouble.
Many companies divide the responsibility for reputational risk between their departments for public relations, marketing, brand management and risk management. Many companies assign the responsibility for protecting the company’s reputation to the public relations department, but not to any individual in particular. Larger corporations and nonprofits may delegate the responsibility to a Chief Reputation Officer and give that individual responsibility for overseeing the company’s reputational risk throughout the organization, including online reputation monitoring.
Shared Responsibility for Reputational Risk Creates Accountability Problems
Where there is no clear authority for reputational risk, there is no clear accountability. Where there is no clear authority, there is also no clear way to institute change. A survey by Clutch indicates that about 54% of digital marketers consider online risk management necessary for corporate success, even though 42% of the companies monitor their organization’s reputation online every day. One-quarter of the companies surveyed said that they had realized growth in sales from investing in online reputation management and monitoring.
About 46% of companies responded that they monitored what people were saying about their brand online by checking comments on their social media accounts. Businesses overwhelmingly used in-house employees to manage their online reputations, with 70% indicating this was their norm. About 35% of the companies said that they planned to allocate more time and money to online reputation management in 2018.
Online Review Sites Inspire Trust from Customers
Online comments and reviews can be a double-edged sword for companies. According to a survey, 84% of people trust online reviews as much as a personal recommendation. Customer reviews are an important way for companies to receive positive feedback from clients that have used their products or services. About 50% of businesses rely on third-party online reviews as a means of monitoring their brand reputation. Positive customer reviews are especially important for startup companies that are trying to make their mark within their industries.
One bad review can negate several positive reviews. Some companies try to protect their reputations by pushing down negative reviews while promoting the many positive reviews, which still allows their customers to have a voice. Allowing prospective clients to see the comments of current and past clients helps to build trust in the brand. Online reputation management is a way for companies to shine a light on the company’s best traits and qualities.
Don’t Confuse Online Reputation Management with Crisis Management
Crisis management is the act of managing the company’s reputation reactively after a negative incident has occurred. Online reputation management is a proactive strategy whereby a responsible employee is actively trying to mitigate harm to the brand because of online postings.
The company’s brand touches many more people than just its customers. Boards also need to be thinking about online reputation management as it relates to their call centers, visitors, vendors, social media outlets and more. It’s important to consider how their employees and representatives treat other employees, individuals within the marketplace, members of the community — essentially anyone that the company’s brand touches. Even how a company implements their social responsibility is a factor in online reputation management.
For companies that aren’t ready to assign the responsibility for reputation management to a high-level communications expert, they don’t necessarily have to create a new position. They just need to ensure that one individual has broad powers to implement change as necessary to protect the company from reputational harm, such as the department head of the public relations department. The accountable employee needs the authority to identify reputational risks and must have support from upper management to take a proactive approach to mitigate reputational risks. Whomever holds the position needs to have access to the CEO to share strategies and concerns, even if those conversations net some hard truths.
What Are the Responsibilities of Online Reputation Managers?
Online reputation managers are responsible for assessing the company’s reputation online and offline. This entails providing the board with an objective report of the company’s reputation and brand. These individuals help to promote a genuine view of the company’s reputation, which they do by monitoring their stakeholders’ beliefs and expectations. Their responsibilities also include measuring the competition’s reputation and perhaps delegating some aspects of reputational monitoring to marketing, investor relations, advertising, human resources or public relations departments.
There Is Value in Online Reputation Management
The popularity of social media and online review postings have made online reputation management necessary for the success of every business. Modern governance practices require businesses to have the right structure and processes in place to manage their brands and reputation. Nearly all employees have some responsibility for protecting the company’s reputation, whether they realize it or not. While the responsibility for reputation leaves its fingerprints on many different groups and individuals, it’s important that the company designate one person to be ultimately responsible and accountable for the company’s branding and reputation to ensure a source for accountability. While it’s common for companies to spread the responsibility for risk management across various departments, they need to be sure that they don’t dilute the importance of reputation monitoring or fail to give it the merit it requires.