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Warren Buffett once remarked, "It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that you will do things differently." Steel City Re provides corporate reputation resilience. We design, build and operate systems (including reputational value insurances) that constrain unwanted behaviors which create headline risk. Download our Q&A or read further.

Savvy executives want to increase, protect and restore their reputation value. This is why. In a market system based on trust, reputation has incomparable economic value. In fact, the word “reputation” sums up the intangible assets that comprise more than 70% of the value of publicly traded companies. Focusing on reputation can materially increase value. When reputation is lost, the value of reputation becomes only too evident, as vividly exemplified by recent financial markets and the fate of some of that industry’s one-time highest fliers. In short, second only to managing cash, managing corporate reputation has emerged as today’s primary business concern.

Reputation grows out of the totality of information stakeholders receive about a company — information that creates the cumulative impression of how the company manages all its business processes. These are primarily the business processes that create an ethical work environment, drive innovation, assure quality, uphold safety, promote sustainability, and provide security.

Reputation risk is emerging as a major corporate concern. In 2010, more than 30% of the S&P500 constituent members disclosed in their annual filings that reputation risk was material to their enterprise value; nearly 1000 traded firms in total provided similar public disclosures. Just a year later, the accounting and audit firm Eisner and Amper reported that 69% of corporate Directors surveyed identified reputational risk as most important to their boards. In October 2011, Zurich Financial Services and Chartis introduced reputation insurances.

Reputational perils are intrinsic to all forms of business organization.Today, the primary form of commercial organization is the business to business network, whether in the supply chain, licensed intellectual property rights, or franchise. Problems in the networks can severely damage reputation-linked (intangible) assets. These problems can fester unobserved because these reputational assets are unaccounted for by traditional accounting methods. Corporate executives and boards ignore reputational perils at their own risk.

Steel City Re offers reputation resilience solutions -- including insurances -- for both companies and their extended networks.

To view a short video on the perils of reputation risk extracted from a January 2011 conference of the National Association of Corporate Directors, Three Rivers Chapter, click here.

Steel City Re is committed to helping clients create reputation-linked asset value through better visibility and control. Steel City Re's innovative solutions for corporate reputation protection are supported by proprietary quantitative metrics, compliance technology, insurances and proven reputation-linked asset value-creation strategies.

Superior management of networks and business processes that create value in reputation-linked assets pays off in more ways than just mitigating problems; it enhances overall performance and delivers consistently higher enterprise values. Steel City Re understands that global aspirations for environmental sustainability, ethical sourcing, quality and integrity can be realized only when corporate actors can enforce behavioral change and measure positive financial results.

Steel City Re, LLC, is a thought leader in reputation-linked asset value creation. We participate in scholarly societies and publish in learned journals.

The Company is a proud sponsor of the Intangible Asset Finance Society and actively supports the Society's blog, MISSION:INTANGIBLE™.

Here are some other sources of information on risk and reputation management:

  • McKinsey Quarterly, June 2009. Companies must step up their reputation-management efforts.
  • Senate Bill S.1074 (draft), May 2009. Risk Management Board Committees - require boards to appoint special committees to oversee risk management.
  • The Conference Board, Report #1442-09-RR, 2009. Assessing reputation risks was the highest-ranked corporate challenge.
  • The Conference Board Research Report No. R-1412-07-WG, 2007. Corporate reputation is increasingly able to either generate or rapidly destroy shareholder value.
  • In re Caremark Int’l Inc. Derivative Litig., 698 A.2d 959 (Del. Ch. 1996), and Stone v. Ritter, 2006 Del. LEXIS 597 (Del. 2006). Duty of care required of Directors to establish systems and controls to manage all corporate assets.

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