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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Involved Boards Must Protect Themselves, Too

C. HUYGENS - Sunday, November 19, 2017
Augmenting Christopher P. Skroupa’s comments in Forbes, “governance warranties,” evidencing oversight, is a priceless strategy to help boards fight reputation risk.

“It’s the board’s job, not management’s job, to say if they are willing to take a certain amount of monetary or reputational risk in any given area. It’s management’s job to figure out how to do the business and set the strategy.“

Read more in Forbes.

Read more on Boards and Reputation Risk

Cost Muliplier Effects of a Bad Reputation

C. HUYGENS - Tuesday, November 14, 2017
In sports, as in business, a reputation shades everything.
"Given Burfict's history and #reputation, he may serve additional punishment for the incident on Sunday." #risk.

Read more in Business Insider.

Read more on Reputation Impairment.

Reputation Loss Can Feel Like A Death

C. HUYGENS - Thursday, November 09, 2017
Reputation is a vital aspect of our public selves. “Reputation is an instrument of moral justice, sharpened by mass communication — a dangerously double-edged one, open to misuse and misappropriation…”

Read more in Financial Times.

Read more on Reputation

Unaddressed Enterprise Risks Leave Boards Exposed

C. HUYGENS - Tuesday, November 07, 2017
Only 61% of respondents use enterprise risk management to inform strategy, says the Risk and Insurance Management Society.

“Responses from 397 respondents from more than 14 different industries were collected online from March 6 to May 6, 2017, according to RIMS….87% agree that executive management expects the ERM program to identify, prioritize, manage and monitor major risks.”

Read more in Business Insurance.

Read more on Enterprise Risk Management

Wells Fargo: Another Damning Report

C. HUYGENS - Sunday, October 22, 2017
The latest blow to the reputation of Wells Fargo, #reputation #risk. OCC issues report on the bank's improper auto insurance practices...problem surfaced in July, after The New York Times obtained an internal report prepared for the bank’s executives.

“The comptroller’s findings …could force the bank to curb, or at least more closely monitor, its practices across the entire company. ”

Read more in New York Times.

Read more on current poster child for reputation risk, Wells Fargo

CEO Cult of Personality Exposes Boards to Reputation Risk

C. HUYGENS - Saturday, October 21, 2017
Cult of personality exposes boards to #reputation #risk

“Any business built on a strong personality [that's] unrestrained can lead to good and it can lead to risk. The point of good governance is to allow the good part of a strong personality to create value while restraining the bad part of a strong personality from creating risk. ”

Read more in Benzinga.

Read more on reputation and Boards of Directors.

Investors (Finally) Discover Costs of United’s Impaired Reputation

C. HUYGENS - Thursday, October 19, 2017
Weak demand in Asia..depressing results; violent (Asian) passenger removal (naively) had little impact on share price—at the time.

“Chicago-based airline forecast…that unit revenues would fall by 1 to 3 per cent…[while competitor Delta] expects the unit revenue measure to rise by 2 to 4 per cent in the fourth quarter. ”

Read more in Financial Times.

More on reputation and United Airlines

Reputation Value Collapses as Trust Falls to Zero at Kobe Steel

C. HUYGENS - Thursday, October 12, 2017
#Reputation #risk at Kobe Steel over quality. In 48 hours, 40% equity fall; 500% credit default swap rise.

“…according to Atsushi Yamaguchi, an analyst with SMBC Nikko Securities…if it fails to demonstrate change in its corporate structure, Kobe Steel risks an exodus of customers and investors over the longer term’ he said.”

Read more in Financial Times.

More on reputation risk and quality.

Prompt Indemnification Benefit of Parametric Reputation Insurances

C. HUYGENS - Wednesday, October 11, 2017
Parametric insurances--available for #reputation, weather, and earthquake #risk--pay on claims quickly. Objective verifiable parameters are the reason.

Mexico's finance ministry said that the country will receive a payout of $150 million from a catastrophe bond after the Sep. 7 earthquake met parameters for magnitude, location and depth.

Read more in Business Insurance.

More on parametric reputation insurances.

Reputation Assurance is a Nobel Idea

C. HUYGENS - Monday, October 09, 2017
Reputation-sparing “governance warranty” can nudge stakeholders to forgive Board failure, according to the Nobel-prize winning behavioral economic model of Richard Thaler.

Thaler brought to prominence the idea of "nudge" economics, where individuals are subtly guided toward beneficial behaviors without heavy-handed compulsion.

Read more in New York Times

More on nudging through signaling and storytelling: http://www.iafinance.org/mission-intangible/tag/signaling/.

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