Reputation – the greatest casualty

It has long been recognised that incidents of fraud, when they become known, impact the reputations of individuals and organisations involved, writes Richard Minogue. Reputation, the perception held by others, will fluctuate in value in response to individual or corporate behaviour; it exhibits a direct correlation with expectations of performance. A good reputation is earned by consistently delivering against expectations, a bad one, the price of failing to meet them. A fraud incident is likely to contribute to a negative perception or, at the least, tarnish a positive image. We will look at the link between fraud and reputation in the organisational context and how it should be managed.

Richard Minogue (richard.minogue@septiagroup.com) has over 35 years’ experience in general management, financial management, internal audit, fraud investigation and integrity risk management. He has conducted assignments on all six continents and regularly lectures and conducts training in integrity risk management. Richard is co-author of “The Anatomy of Fraud and Corruption” (Brytting Minogue and Morino, Gower 2011).

The value of reputation

Damage implies a loss of value, but what is it that makes reputation valuable in the first place? The value of the perception held by others is a function of who these “others” are and how they will influence the organisation’s ability to achieve its goals. Relevant others are often referred to as stakeholders. The organisation’s reputation among its stakeholders will influence how they act, how they support, oppose or remain ambivalent to its interests.