For an organization, its reputation is a compilation of views and impressions possessed by all of its stakeholders: the investors, clients, suppliers, competitors, employees, partners, media, financial .analysts, special interest groups, politicians, regulators and the general public.

It is important to understand that these perceptions can be shaped by actual events or imaginary ones. Unfounded rumours such as alleged product tampering can be just as damaging to a company's reputation, as an accidental release of toxic substances into the environment.

Reputation can be subcategorized to that pertaining to the corporate image, to the brands owned by the company, or to the company's key personnel (especially that of the CEO).

Reputation risk management is concerned with protecting your reputation, arguably your organization's most valuable asset. Reputation risk arises when there is a situation, event or series of events that have the potential to negatively influence public opinion and the perceptions of your other stakeholders. Examples of such situations or events include serious corporate fraud involving management (total collapse of Parmalat in 2003 ) , an extensive product recall (Merck's recall of Vioxx in 2004), or a major lawsuit (U.S. government lawsuit against Philip Morris and the tobacco industry in 1999). Reputation risk management deals with the unexpected destruction and rebuilding of reputation.

However, an organization should not just manage the unexpected loss of reputation; it should also be concerned with reputation building. Hence, the term – reputation management may be more appropriate, when your organization's reputation program incorporate elements of building, protection and recovery. Such a comprehensive program would incorporate plans and actions for brand management, quality control, media relations, public relations, investor relations, communication strategies, market research and industrial relations.

Due to its varied components, the responsibilities of reputation management should not be delegated solely to the risk management department or to any single department or function.

Brand management aims at building the reputation of the company's brand though deliberate planning and implementation. This is essentially a marketing responsibility and involves dealing with advertising agencies.

Many departments such as Production, Sales, and Customer Services are responsible for quality control. Quality control is geared towards maintaining a high quality in the company's outputs. It includes the production and delivery of the products and services, and general corporate performance.

Corporate Communications or Media Relations are concerned with maintaining good media relations. The media can be your best friend or worst enemy in times of trouble. If an organization has a comprehensive crisis management program, there should be a business continuity plan, an emergency response and management plan and a crisis communication plan. A good crisis communication plan, which contains your communication strategy for dealing with a crisis, is essential in the preservation of reputation.

Market Research needs to monitor public perceptions which could serve as a early warning system. Sometimes, it is possible to nip the problem at its bud before a minor event escalates to a major crisis.

Besides Customer Service and the Media Relations, departments involved with maintaining good relations with other stakeholders such as investors, suppliers, environmental groups and other interest groups, have important roles in shaping the perceptions held by these stakeholders. For example, a change in reputation would most likely affect whether investors want to invest in the company's shares, which in turn changes a company's market value

As many departments and functions are directly involved in reputation management, it is a challenge to implement the program on an enterprise-wide perspective. Forming a “reputation committee” is a first step but there is still much more to be done. Just for reputation risk management alone, the organization should have at least a crisis communication plan in place – the main responsibilities of which falls between Media Relations and Risk Management; both may want to pass them on.

Another problem that often surfaces is finding the value of your organization's reputation. Senior management may be reluctant to commit resources to reputation risk management unless they are able to get a handle on the value of reputation. Determining the precise value of reputation and the cost of recovering it can be problematic. A rough estimate can be obtained by taking the differences between market value of the firm and its net book value. However, this is not possible when the organization is a government agency or a nonprofit organization. As the value and rewards of reputation management is undisputable, the difficulty should not discourage the organization, at the very least, from formulating a crisis communication plan and setting up a crisis management team.

The task of implementing a holistic approach to managing reputation may seem daunting to most managers but they would certainly agree to its importance and the need for it. A systematic approach coupled with the assistance of external expertise could make this a painless and rewarding process.