Willis: Rising uncertainty reshapes reputational risk as firms tighten controls

Willis has warned that rising geopolitical instability and the politicisation of environmental, social and governance (ESG) issues are reshaping how organisations assess reputational risk, with uncertainty increasing even as controls are strengthened.

Its latest “Reputational Risk Readiness Survey Report” shows corporate decision-makers are less confident in how stakeholders perceive their organisations and less certain about their key vulnerabilities.

Only 37% of respondents said they were aware of major negative sentiment hotspots around their brand, down from 56% in 2024, while appetite for reputational risk has fallen sharply.

More than half of respondents, 56%, said they now have a low appetite for reputational risk, compared with 36% previously.

At the same time, reputational threats are rising up the risk agenda, with 82% of organisations ranking it among their top risks.

Cyber remains a leading concern, with 67% citing cyber-attacks as a major reputational threat, while 57% pointed to social harms such as labour exploitation within supply chains.

Despite this growing uncertainty, the report suggests organisations are responding by strengthening controls and embedding reputation more firmly into enterprise risk frameworks.

More than 30% of respondents said they now have strong capabilities to model the financial impact of reputational damage, up from just 11% in 2024.

David Bennett, head of reputational risk management in Willis’ direct and facultative team, said firms must move beyond viewing reputation purely as a communications issue.

“In uncertain and turbulent times, organisations who take a surface approach to reputation as a function of communication and PR may be found wanting,” he said.

“Those that integrate it into their business processes, and invest in building trust with stakeholders and customers every day, are better placed to build the bases they need to avoid credibility hiccups when a crisis hits,” he continued.

Bennett said a more structured, risk-based approach is essential.

“A good starting point is developing a deeper understanding of the specific reputation risks that affect a business,” Bennett said.

“Identifying and monitoring these key vulnerabilities can help organisations direct efforts and resources to neutralise threats and turn perceptions around,” he added.

Bennett explained that advances in modelling are also helping organisations treat reputation as a quantifiable risk.

“With the right tools and partners, modelling the frequency and severity of likely sources of reputational threats is possible,” he said.

“The majority of reputational crises emerge from issues that are already known and can be anticipated and managed,” Bennett continued.

“Organisations should focus on building their understanding of these underlying risks through sentiment tracking and risk intelligence, while developing their crisis preparedness and tightening broad level accountability,” he added.