Director Dialogue: Board Oversight of Reputation Risk

Corporate reputation is qualitative, challenging to measure, and critical to a company’s long-term health. While definitions may differ, most agree with Warren Buffett’s famous observation that “It takes 20 years to build a reputation and five minutes to ruin it.” From a business perspective, reputation can mark the tipping point between success and failure. Despite chronic threats to corporate reputations, directors may not consistently monitor their company’s position in the marketplace. While 47 percent of public company directors routinely oversee stakeholder relations, 29 percent indicate that they do not receive enough information regarding non-financial risk. 

With this in mind, NACD and Protiviti convened a series of three roundtable meetings with over 60 U.S. corporate directors in 2014 to discuss how boards can more effectively oversee reputational risk.