Concerned about their reputation, more major companies globallyare investing substantial resources to manage their reputation riskand have increased their efforts to do so, according to a newreport from The Conference Board.

"Safeguarding reputation is even more critical today becausecompanies have developed successful ways to make reputation riskmanagement part of their overall risk management," said EllenHexter, director, enterprise risk management at The ConferenceBoard, a global business research and membership organization.

Ms. Hexter, who co-authored the report with Sandy Bayer,president of Bayer Consulting, said, "In addition, differentstakeholder groups are becoming more sophisticated in how theydrive corporate reputations."

Additionally, in a statement, Ms. Hexter said, "Mostimportantly, consumers have high expectations that companies willnot only produce quality products and services but also will actethically in their creation and distribution."

The report, "Managing Reputation Risk and Reward," is based onthe findings of The Conference Board Reputation Risk ResearchWorking Group and a survey that includes 148 risk managementexecutives of major corporations. Twenty-five percent ofrespondents were in the financial services industry.

The report defined reputation as the way a company is perceivedby each of its stakeholder groups and reputation risk as the riskthat an event will negatively influence stakeholderperceptions.

More than three-quarters of the survey respondents, 82 percent,said their companies are making a substantial effort to managereputation risk. Eighty-one percent said they have increased focusin this area over the last three years.

When respondents were asked to rate the challenges theirreputation risk programs face, 59 percent rated assessing theperceptions and concerns of stakeholders as an "extremely" or"very" significant issue, making it the highest rankedchallenge.

Of those surveyed, however, only 49 percent of executives saidthe management of reputation risk was highly integrated with theirenterprise risk management (ERM) function or another risk oversightprogram.

Managing reputation risk as a stand-alone program, the surveyfound, may leave a company without a comprehensive view of all therisks it faces.

It reported that in response to this danger, some companies haveeither placed their reputation risk management program within ERMor created a cross-functional structure that ensures closecoordination.

While surveys of customers, employees and other stakeholdershave been widely used for years, some companies are now bringingthese disparate assessments together in an effort to gathercomparable data on a consistent set of reputation attributes,according to the report.

To ensure that reputation is taken into account, Novo Nordisk,Capital One and other companies are giving their business units theprimary responsibility for assessing and managing such risks,Conference Board said.

Other innovations in this area include employing formalreputation models--either developed internally or by specialistconsulting firms--and using quantitative methods to identify thegreatest reputation risks and opportunities.

Conference Board said 59 percent of those polled indicated thatassessing the perceptions and concerns of stakeholders was anextremely or very significant issue--making it the highest-rankedchallenge.

The report said media monitoring to protect reputation hasbecome more sophisticated and tools exist to assess whethercoverage is positive, neutral or negative and to assess thecredibility of publications and the prominence of coverage.

Although consumers and investors are increasingly gatheringinformation from blogs, online forums and social networking sites,only 34 percent of survey respondents said they extensively monitorsuch sites, and only 10 percent actively participated in them.

Conference Board's Research Working Group made the followingrecommendations for companies to safeguard reputations:

o Actively involve boards of directors in reputation riskmanagement.

o Demonstrate to leaders and management teams in business unitsthe impact of their actions on reputation.

o Integrate reputation risk management with ERM or other riskmanagement programs.

o Quantify the value of reputation.

The authors said, "While crises are sometimes inevitable, acompany's reputation when it is most vulnerable and how theorganization responds can have an enduring impact on how it isperceived for years to come."

Of the companies surveyed, 48 percent were located in the UnitedStates, 41 percent in Western Europe, 8 percent in Asia and 3percent in "Other."

The breakdown of the corporate role of those polled was:communications, 34 percent; enterprise risk management/riskmanagement, 29 percent; legal, 10 percent, "other," 8 percent;finance, 7 percent; reputation management, 6 percent;C-suite/senior management, 4 percent; and middle management, 1percent.