Personal Reputational Risk

Personal Reputational Risk
January 28, 2020 admin

Personal reputation risk is one of the most important personal asset. This stems from the fact that reputation is a major source of competitive advantage both personally and corporately.

People with strong reputation can reap many benefit such as increased self  and public value, stronger self-sales,  increased ability to attract talented persons, less community resistance, and the benefit of the doubt when negative events occur. This and many more provides a basis for you as an individual to want to manage your reputation risks successfully.

Personal reputation risk comprises the risk of loss in value of a person’s franchise or personality that extends beyond event-related accounting loss and is reflected in his share performance metrics. Reputation related loses reflect reduced expected income, higher spending etc.

The presence of personal reputation risk in an individual can cause a significant damage to his how he is perceived. It creates the inability to establish new relationship or even continue existing relationship.

In recent times, due to globalization, in the blink of an eye, a known/unknown event, or a misjudgment can rip your reputation to shreds; and once gone, rebuilding it can sometimes be impossible.

Despite the potential impact, there are a few guidelines that can help in managing personal reputational risk:

  • Implement a proactive screening process:
    • filter out inappropriate people in your life,
    • establish limits on conduct or things that can cause reputational risks
    • monitor other people’s opinion of your conduct and personality.

A classic mistake many people make is to copy other persons  without considering their approaches and potential pitfalls.

  • Have effective Control Functions
  • Have an “umbrella of friends” that can see you from a broader perspective
  • Establish regular communication
  • Prohibit certain types of people. Scrutinize ur friendship subject to reputational risk
  • Perform a gap analyis on yourself.; this is to determine obvious opportunities for improvement.

Note that a damaged personal reputation is an outcome rather than a cause; so the causes that seeks to damage a person’s reputation needs to be managed. However, alongside the process of managing these causes, it is of utmost importance to build a reputational dimension into the entire process.


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