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A 1MDB hoarding in Kuala Lumpur

Last week I had the fortune to be invited to speak on the topic of reputational risk management to MBA students and assorted internal auditors, risk managers, HR and communications executives at the Othman Yeop Abdullah Graduate School of Business at the Universiti Utara Malaysia in Kuala Lumpur.

Reputation risk may not be as high up the agenda of boards of directors and management teams in Malaysia as in some other countries, but it has gained importance in recent years due largely to two major crises:

  • the 1MDB scandal that led directly to the overturning of the Malaysian government, the arrest and forthcoming trial of former prime minister Najib Razak, fraud investigations in 10+ countries, and criminal charges laid against Goldman Sachs and two of its former employees
  • and the various woes befalling Malaysia Airlines (here’s my take on the mystery of MH370 from an online/social media perspective; if you haven’t already, I strongly recommend you read this in The Atlantic for what may well be the last word on the tragedy).

Whilst unresolved, both crises helped erode confidence and trust in institutions in Malaysia and raised (and continue to raise) legitimate questions about how Malaysia Inc – which is still largely dominated by a few family-controlled businesses – operates.

Accordingly, companies (especially government-owned or linked ones) and parts of government and civil society are actively considering the extent to which they are exposed to reputational risks, and thinking harder about how these should be minimised and managed.

The whys and hows of effective reputation risk management

Predicting and managing reputational risks poses a wealth of tricky questions and challenges – amongst them:

  • How should reputation risk be defined?
  • What are the primary drivers of corporate reputation?
  • What forms do these risks take?
  • Who is responsible for an organisation’s overall reputation?
  • Who should own corporate reputation on a day-to-day basis?
  • What role(s) should communications and marketing play in reputation risk management?
  • How best measure, track and report reputational threats?
  • Why can leaders be reluctant to get to the root of reputational issues?

I tackled these and other challenges in my presentation, setting out solutions based on my professional experience, research and observation.

Here are my slides:

Fortunately, trust in Malaysia appears to have been restored to some degree over the last eighteen months.

However it is clear that organisations based in Malaysia – and elsewhere – continue to grapple with the strategic, governance and operational challenges reputation risk management inevitably raises.

I will explore some of the questions raised in my talk in more depth over the coming weeks and months on this blog.

Meantime, I hope you find the slides useful.

With MH370, MH17 and now QX8501, food safety and health scares in China, ongoing supply chain issues, hacks aplenty, popular protests in Taiwan and Hong Kong and terrorist attacks in Australia and China, it has been a busy year for public relations and crisis communications professionals across Asia.

Here are the most popular articles published to this blog over the past twelve months.

1. Malaysia Airlines, MH370 and social media crisis communications
2. Change communications and social media
3. Safeguarding corporate reputation in social media
4. Why your online reputation is not your reputation
5. Customers at the core? McDonald’s messes up its crisis messages
6. Crisis communications in Malaysia
7. How to handle online defamation
8. Assessing the Hong Kong government’s communications during Occupy Central
9. Asia’s most reputable companies
10. What’s the right social media strategy?

With traffic to the blog up 35% over 2013, I’m encouraged to keep plugging away on these topics.

If you’ve any suggestions, I am all ears.

Best wishes for a smooth and prosperous 2015!

 

Compared to more developed markets in the west, trust in Asia is in fairly rude health, according to Edelman’s 2013 Trust Barometer.

Some points to bear this out:

  • 6 of the 10 most ‘trusting’ countries are Asian – topped by the Chinese, Singaporeans and Indians
  • Above average trust in business in many Asian markets, notably India, Indonesia, China, Singapore and Malaysia
  • Very high levels of trust in government in China and Singapore, with otherwise generally higher average levels of trust in most other Asian markets (with the exception of Japan and Korea)
  • Significant trust in CEOs in most Asian markets
  • The five countries in which the media is most trusted across the world are China, India, Indonesia, Singapore and Hong Kong
  • Other than in Mexico, NGOs are held in the highest regard globally in Asia.

The study also reminds us, should we need reminding, that trust in Asian companies in developed countries remains low:

Edelman2013_AsianCompanyTrust

It is hardly surprising that Indian firms, many of which have been expanding internationally for some time, are held in higher esteem in developed markets than their Chinese counterparts. Yet the reverse is the case in emerging markets. Why?

My guess is that the principal reason for this is that Chinese firms have placed greater emphasis on expanding first in emerging Asian markets, whereas Indian firms have tended to leverage their Anglophile connections and shared English language to prioritise markets such as the UK and USA.

Equally, it could be argued that Chinese firms have a more substantive presence in the more widely known consumer electronics (Haier, Huawei, ZTE, Lenovo etc) and goods sectors, whereas Indians are better known abroad for B2B services (Infosys, Wipro, Tata Consulting etc) amongst business and technology professionals.

 

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