Why validate the compagny’s reputation ?

due diligence old papper

Reputation

According to a Deloitte study from December, 2012, 87% of leaders consider reputational risk as the most important strategic risks for their business, and 41% of them consider that a breach of their personal reputation may have impact on business turnover. Finally, more than half of the managers surveyed wish to implement tools for analyzing the image of the brand to anticipate any risk of reputation.

Reputation is related to many factors, very different from each other as:

  • ethics, integrity, fraud and corruption
  • health risks and safety related
  • risks relating to products and services
  • personal reputation of senior management and employees
  • the reputation of customers, suppliers and subcontractors
  • Competition’s attacks
  • exogenous factors such as natural disasters

To face this risk, it is necessary to know the environment, the competitors, but also his closest collaborators. And perform due diligence ahead of the realization of a relationship is important, and can help in many cases to avoid reputational risks.