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70% of businesses experience threats to corporate reputation

24 June 2020

Reputational issues top the list of risks to businesses

  • 70% of businesses have experienced an event that has threatened its reputation
  • One in three (35%) of businesses believe they have a reactive approach to reputational risk, rather than proactive.

Businesses are becoming increasingly vulnerable to reputational risk, with 70% of businesses having experienced an event that has proposed a threat to its reputation, according to the fifth annual Global Risk Landscape report from accountancy and business advisory firm BDO LLP.

BDO’s survey of 500 C-suite executives across EMEA, Europe, the Middle East, Africa, Asia-Pacific and the Americas shows companies are alert to the dangers, with 25% saying shareholder price is a primary consequence of reputational damage, and a quarter also believing customers will take their custom elsewhere. Family run business and manufacturers felt the highest reputational risk.

Despite the threat, it is clear that too many companies remain reactive in their approach, with less than half (45%) of companies believing their crisis strategy is proactive, with over a third (35%) considering themselves to be reactive when it comes to reputational issues.

Trying to demonstrate corporate integrity while acting without values is an issue that can touch even reputable companies. BDO’s survey revealed the scale of so-called ‘integrity washing’ the act of businesses worrying more about the perception of integrity than the practice. A significant 87% of executives believe their organisation is culpable and almost half (49%) agreed with the statement: “Completely, so long as we are perceived to have integrity we do not prioritise putting it into practice.”

Nigel Burbidge, Global Chair, Risk Advisory Services at accountancy and business advisory firm BDO LLP, says:

“Clearly integrity is vital, with 99 per cent of respondents agreed on that. Being trusted confers extraordinary advantages to a business and secures customer loyalty. Customers flock to brands they believe in and that sense of integrity allows the company to outperform rivals.

“However, we found deep disagreement on who is responsible for transparency. One in three companies admits to being “reactive” on reputation: not the best strategy. And a worrying 87% say their company may be guilty of integrity washing. Clearly there is work to do.

“Integrity should be woven into the fabric of the company. Everyone must share the same ethos.”

ENDS

Note to editors

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 

BDO LLP

BDO LLP operates in 17 locations across the UK, employing nearly 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network

The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn. 

Contacts

Emma Ordidge
Senior PR Adviser on behalf of BDO LLP
[email protected]
07812380571

BDO press office:
020 7893 3000
[email protected]