Damage to brand and reputation has risen to the top of an annual survey of risks facing global companies amid a wave of product recalls, hacker attacks, fraud investigations, and other headline-grabbing incidents.
Aon Risk Solutions noted in its Global Risk Management Survey 2015 that a long list of well-known companies saw their reputations tarnished by unexpected incidents last year. In the 2013 survey, damage to brand and reputation was ranked the number four risk.
“The risk to reputation and brand poses a major concern for organizations that generate over [$1 billion], since they are under greater media and public scrutiny due to their size and wider name recognition,” Aon said.
The survey reflects the views of a sample of 1,400 risk management professionals polled by Aon. In this year’s poll, cyber risk (No. 9) made the top 10 for the first time in the wake of several recent high-profile cyber attacks on major firms.
Also in the top 10, in descending order, are economic slowdown/slow recovery, regulatory/legislative changes, increasing competition, failure to attract or retain top talent, failure to innovate/meet customer needs, business interruption, third-party liability, and property damage.
“It’s little surprise to see cyber risk enter the top 10 at the same time we are seeing increasing concern about corporate reputation as the two issues are a great example of the interconnectivity of risk,” Stephen Cross, chief innovation officer at Aon Risk Solutions, said in a news release.
According to PwC, the number of detected cyber attacks rose by 48% in 2014 and is expected to increase further in 2015, with roughly 117,000 attacks a day. “As cyber attacks are becoming more frequent, we expect this risk to remain a top concern in the near future,” Aon said.
Property damage appeared on the top 10 risk list for the first time since 2007, indicating, Aon said, “a clear concern for increased and changing threats to key business facilities, and their potential impact on an organization’s ability to continue operations and achieve its business goals.”