REPUTATIONAL RISK MANAGEMENT

REPUTATIONAL RISK MANAGEMENT

Introduction

Reputation is the trust and belief which many stakeholders have in the entity, and they expect to have the same attributes in the future (Honey, 2009). Building a good reputation for an entity brings about the sense of responsibility toward the community. Reputation management is instrumental but should not feature in the situation of a reputation crisis. Soft skills like understanding stakeholders, anticipating future trends and needs, prudence, listening to the stakeholders needs, and planning for the future are required in reputational management. Reputational risk arises from the situation where a firm encounters loss concerning revenue, capital or shareholders value to damaged reputation (Atkins, Drennan & Bates, 2006). This means that reputational management has a direct impact on the financial performance of an organization. Given the importance of reputational risk management to any organization, this report evaluates the reputational risk management in the Barclays Bank.

Barclays is a universal bank that has operations in investment, wholesale and retail banking, and it also offers mortgages and wealth management. The bank is based in London, UK and has operations in more than 50 countries around the world, and estimated 48 million customers (Ackrill & Hannah, 2015). It is a publicly traded company where it is listed in both NYSE and LSE. As of 2014, the bank had 132300 total number of employees. Banking and financial services industry, in which Barclays operate, is mainly based on trust, where small damage on the trust that is vested by people on the institution can lead to its collapse or financial deterioration. As such, it is imperative to carry out reputation risk management (Pohl & Freitag, 2014). For this reason, Barclays bank reputation management process is instrumental to its sustainability and ensuring that the bank remains in business for the foreseeable future.

Management of Reputational Risk in Barclays

Reputational risk management process involves assessing, evaluating, managing and measuring the risk (Larkin, 2003). Given that reputational risk management helps to ensure that the organization is profitable, has……………………