Corporate Risk & Valuation · Entry 06 of 71

What Is Reputational Risk?

The fragile nature of public trust and brand perception

Core Definition

Reputational Risk refers to the possibility of damage to a company's reputation and public perception due to negative events or behaviors.

Key Triggers

1. Can result from scandals, customer complaints, or unethical behavior: Product safety recalls, leadership failures, or high-profile public controversies.
2. Impairs customer trust and affects business relationships: Loss of customers, partner pullouts, and drop in stock price.