MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Uber Acknowledges Cost of a Bad Reputation

C. HUYGENS - Monday, September 25, 2017
Uber CEO Dara Khosrowshahii explains the loss of the company's license to operate in London:

“The truth is that there is a high cost to a bad reputation. Irrespective of whether we did everything that is being said about us in London today (and to be clear, I don't think we did), it really matters what people think of us, especially in a global business like ours, where actions in one part of the world can have serious consequences in another.”


Read more in Inc.

Trump and Timing the Measurement of Reputation Loss

C. HUYGENS - Sunday, September 24, 2017
The loss and stabilization of President Trump's reputation mirrored the pattern seen with event-driven corporate reputation losses, as predicted by Steel City Re on May 19.

Reputation value loss is indemnifiable through Steel City Re's reputation assurance solutions. Determination of the magnitude of the loss is made 20 weeks after recognition of all three triggers of the policy. This time window for discovery of the actual going-forward magnitude of reputation value loss was memorialized in Steel City Re's processes after the empirical study of of tens of thousands of  reputational loss events. The bottom line, is that at around 20 weeks after an event is recognized by stakeholders,  the resuilting corporate reputation stabilizes at its new level. This level becomes the new corporate reputation baseline until a new adverse event or favorably surprise shocks the market and materially resets the reputational value again.

On the basis of this empirical model, Steel City Re predicted in the Financial Times on 19 May that President Donald Trump's deteriorating reputation would stabilize on or about 18 September 2017. Reports from NPR and Rasmussen Reports published on 22 and 23 September confirm this prediction.

From NPR: President Trump's poll slide appears to have stabilized.

From Rasmussen Reports:  The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 43% of Likely U.S. Voters approve of President Trump’s job performance. Fifty-five percent (55%) disapprove.

The latest figures include 27% who Strongly Approve of the way the president is performing and 44% who Strongly Disapprove. This gives him a Presidential Approval Index rating of -17. (see trends).

The Steel City Re model suggests that the current measure of reputational value will be stable until a shock such as a major event on the Korean peninsula or revelations from Robert Mueller’s sprawling special-counsel investigation resets stakeholder expectations once again.

Fleeing Clients Indicate Reputational Damage

C. HUYGENS - Wednesday, September 20, 2017
KPMG and McKinsey have scrambled to limit the damage caused by their links to the Gupta family, which is at the center of South Africa’s worst political scandal since the apartheid era.

“KPMG on Tuesday lost two further audit contracts in South Africa and faced widespread reviews as clients sought to distance themselves from reputational damage from their links to the firm. McKinsey faced allegations of fraud and collusion in corruption from South Africa’s main opposition party over the management consultant’s work with a company linked to the Guptas, the family accused of corrupting state contracts through ties to President Jacob Zuma.”

Read more in Financial Times.

Artful Dodger When Reputation in the Cross Hairs

C. HUYGENS - Thursday, September 14, 2017
Even when dutiful, loyal and competent, the personal #reputations of senior executives and board members stand in the crosshairs.

“CEOs need new tools like reputation assurance products to provide third party warranties and demonstrate good governance in a way that creates an easy to understand, and completely credible alternative narrative when stakeholder dissatisfaction rears its head.”

Read more in Industry Week.

Smelling Blood, Activists Target Another Professional Services Firm

C. HUYGENS - Tuesday, September 12, 2017
Activists target KPMG over South African ethics issues. Response:

“We’re determined to rebuild the public’s trust in KPMG’s South African firm, and will stand behind the firm and will work with it for as long as it takes…”

Read more in Financial Times.

Ethics Scandal Wipes Out Another Professional Services Firm

C. HUYGENS - Friday, September 08, 2017
PR agency Bell Pottinger loses fight to retain clients and salvage its reputation; ethics scandal sends UK arm into administration.

“In a damning report, the Public Relations and Communications Association concluded that its messaging for the Guptas targeted wealthy white individuals and corporates in South Africa and was likely to inflame racial tensions. Since Monday, a host of big name clients and companies have sought to distance themselves from Bell Pottinger with HSBC, TalkTalk and Ascential joining luxury brands group Richemont and Investec in publicly abandoning the firm.”

Read more in Financial Times.

Commander in Chief Reputation Impairment

C. HUYGENS - Thursday, September 07, 2017
Reputation drives  both hope and fear. That is why reputational value impairment can manifest as either dashed hopes or fearlessness.

Microsoft's Smith says in the beginning of 2017, business leaders looked around and wondered how they would navigate this new unpredictable environment. They feared being attacked by the commander in chief on social media. Now, Smith says, "I don't think people get up in the morning worrying about tweets. We have much bigger problems to worry about than that."

Read more in NPR.

Financial Risk Body Armor Needed

C. HUYGENS - Sunday, August 27, 2017
Repeated blows to reputation will eventually cause the financial equivalent of dementia. For qualified companies and their leadership, reputation risk solutions can be life saving.

Read more in Risk & Insurance.

No Country for Old (Insurance) Captives

C. HUYGENS - Friday, August 25, 2017
Attention captives bearing reputation risk, review programs…implement immediate changes. Thus opined the court: Although

“…organized and regulated as an insurance company, paid the claims filed against it, and met the minimal capitalization requirements (but it)… was not operated like an insurance company, it issued policies with unclear and contradictory terms, and it charged wholly unreasonable premiums….(B)ased on the facts the court focused on, it will be vital for all captives to undergo a thorough review of their program, and to implement immediate changes”

Read more in Business Insurance.

Reputation Now Key at Consumer Level

C. HUYGENS - Thursday, August 24, 2017
Reputation risk is a material threat to value especially in financial services, automotive and healthcare.

"CorpSumers feel so strongly about brand reputation, that over half (51%) will continue buying a product that has disappointed them because they believe in the company or share its values."

Read more in Holmes Report.

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