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The Vulnerability of Corporate Reputation explores the role that reputation plays in the success and failures of companies.This book focuses on the traditional topic of reputation risk management, the process of reputation, reputational excellence and examines leaders whose reputation and foresight could benefit the organization they steer.

Inhaltsverzeichnis

Frontmatter

Introductory Remarks: The Traps of Maximizing Shareholder Value

Introductory Remarks: The Traps of Maximizing Shareholder Value

Abstract
Bad corporate behavior potentially blackens the corporate reputation of the firm, undermining the relationships and trust on which an organization is established. Trust is the glue that holds any group or organization together. Pursuing opportunistic profit maximization at any cost seems to be counterproductive if considered over a longer time period. A more nuanced framework may be more compelling and sensible, in which organizations embrace the goals of serving their customers and respecting their employees and society at large.
Peter Verhezen

The Complexity of Governing Reputational Risks

Frontmatter

1. Winning the “Hearts and Minds” of Stakeholders

Abstract
Managing corporate reputation requires boards and top management to assume different perspectives, and to focus on a number of objectives that are well beyond mere profit maximization. Internal drivers of values, beliefs, purpose and organizational culture are an effective counterforce to behavior that only seeks short-term profitability at all costs. Reputation risk management aims at increasing the odds of good outcomes and reducing the odds of bad outcomes. Good reputation management relies not only on vigilance and staying informed, but also on a readiness to respond quickly and effectively to challenges or perceived problems as and when they arise.
Peter Verhezen

2. Reputation under Direct and Indirect Reciprocity

Abstract
Repeated encounters as in direct reciprocity between the same individuals engender trustworthy behavior. However, under indirect reciprocity where people do not necessarily often meet each other, relationships and exchanges are built on the reputation of those participants. In others words, thanks to the power of reputation, we are willing to be involved with others or help others without expecting an immediate return. It seems that we ll behave less selfish when we know that we live in the shadow of the future, as expressed in our reputation. Having a good reputation carries quite some benefits for businesses or individuals.
Peter Verhezen

The Quest for Reputational Excellence

Frontmatter

3. Reputation in a Digitized World: Act Responsibly, Always

Abstract
The digitization of our world has changed the way we do business. The digitization has drastically decreased the overall transaction costs between different parties, be it an opportunity for some or a threat for others. Some companies like Apple, Amazon, Airbnb have embedded this digitization into their core business model. But other more traditional companies are possibly following suit, embracing the benefit and productivity gains of information communication technology.
However, social media are also exacerbating the risk to reputation for every company globally. Because of this increased transparency and pressure on companies to address key stakeholders’ concerns using social media to get their message heard, board directors need to consider ways to include these demands while at the same time not jeopardizing their fiduciary duty to achieve the financial objectives.
Peter Verhezen

4. Boards Acting Wisely: Be Different, Beyond Compliance

Abstract
Governance is more than compliance; it refects a culture or attitude that embraces consistency, responsibility, accountability, fairness, transparency and respect for shareholders’ rights and stakeholders’ concerns. Governance and reputation management are correlated. The more a board is able to fulfill its fiduciary duties of loyalties and care, the less reputational risk and possibly the higher the reputation of the organization. Good governance provides the check and balances to control risks and to prepare organizations to embrace opportunities. A board promotes and communicates the central idea of why the company exists and how the company will collaborate and compete ethically and win. Boards have evolved from rubber-stamping to monitoring and control, though some excellent boards are now taking a more active leading and coaching role.
Peter Verhezen

Concluding Remarks: The Vulnerability of Corporate Reputation

Concluding Remarks: The Vulnerability of Corporate Reputation

Abstract
Reputation is one of the most undervalued but nonetheless crucial organizational assets. A good corporate reputation can lead to numerous benefits such as lower costs, competitive barriers that enable firms to charge a premium price, to obtain improved credit rating, to attract better employees and to retain more loyal customers, all translating into improved performance and increased profitability. Reputation also provides clear signals to others about intentions or activities. The notion of reputation can be a touchstone that enables leadership to change strategic direction according to sound norms and structures of governance.
Four generic recommendations aim to create, enhance or preserve corporate reputation: (1) communicating a corporate narrative based on a meaningful purpose versus short-termism; (2) collaborative innovation versus self-focused competitive advantage at all costs; (3) caring for “people, planet and proft” versus shareholder value maximization; and (4) governing responsibly beyond compliance versus minimally interpreted fiduciary accountability.
Wise and resilient leadership built on appropriate foundations of good corporate governance usually performs better over a longer period. Despite the importance of corporate reputation, it remains vulnerable and dependent on outside perspectives.
Peter Verhezen

Backmatter

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