Many companies put reputation ahead of profit, one study has suggested.
The Chartered Institute of Management Accountants (CIMA) found that 76 per cent of respondents said their organisations are prepared to lose money in the short term, in order to protect their long-term reputation.
Recruiters need to ensure that people who search for jobs look for candidates with an awareness of the market and the importance of maintaining performance standards.
Some 76 per cent of CGMA designation holders around the world now see more focus on reputation risk in their industries and noted three primary reasons for the trend.
These were market demand for more transparency, reputational failure at a leading organisation and the increasing popularity of social media.
Around the world, 65 per cent of CGMA designation holders claimed their organisations often or always have financial implications of reputational risk when making decisions, while nearly half (44 per cent) said their organisations have rejected projects that made financial sense.
Tanya Barman, head of ethics at CIMA, said: “Organisations are increasingly recognising the need to take reputational risks very seriously if potential crises are not to turn into catastrophes.
“After all, nearly a quarter of businesses surveyed admitted to experiencing reputational failure in the past, and the widespread use of the internet and social media casts a harsher spotlight than before. However, what is very worrying is the revelation that businesses still appear to be struggling with how they go about managing non-financial reporting in this area.”
Ms Berman went on to say that finance directors and leaders need to start moving away from focusing primarily on the short term.
He advised them to start collecting, reporting and monitoring reputational risk information.
Posted by Jon Aspinell on 8th April 2013
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