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New Zealand businesses have been criticised in a new report on risk management.
The study, conducted by Senate Communication Counsel and TNS Global, showed that despite reputation being considered the second biggest risk to any organisation, only half the managers surveyed considered it an organisational asset.
Internationally, executives identified direct threats to their reputation as the greatest risk their organisations faced. However, only half as many bosses in New Zealand agreed, citing "human capital" risk as their main concern. This was followed by reputation, IT network issues and government regulation.
But New Zealand organisations feel much safer than their international counterparts, with just 2 per cent mentioning terrorism as a potential risk factor. The main threat to reputation was how the public perceived the organisation's treatment of its employees.
Six out of 10 chief executives thought that risk management was not understood well enough in the country's boardrooms. And four out of five senior managers thought company directors should do more to understand reputation risk management. Only half recognised a good reputation as an asset, yet all mentioned a bad reputation as a risk to their organisation.
When it came to managing reputation, New Zealand organisations were found to have their heads in the sand. While they agreed that threats to reputation were harder to manage than other sort of risks, they chose to ignore the problem, instead focusing on things they could influence more easily.
Eighty-five per cent of New Zealand senior executives surveyed claimed to be active in enhancing and protecting their reputations. However, the report showed they were unsure how to go about it.
Eighty per cent did not monitor the opinions of political activists and pressure groups and two-thirds of those surveyed did not seek to understand the perceptions of the general public. Over a quarter did not research their reputations in the media. And just 20 per cent monitored the perceptions of their own customers.
Nearly every respondent stated it was the role of the board and the CEO to be the "reputation guardian".
