All the time that supply chain weaknesses persist, the potential grows for long-term reputational harm to stock valuations and to corporate reputations.
Boardroom threats are driven by supply chain problems
Why is reputation risk so multi-faceted?
Of course, supply chain is not the only driver of boardroom and reputation risk. Many other factors are at play, not least the threat that COVID-19 and its many variants pose from a broader liability perspective. As businesses face challenges from customers, suppliers and employees in terms of duty of care, so company leaders are coming to grips with the challenges of operating in a much less predictable social and economic environment.
Energy and utility companies rate reputation risk top in our research, with 17% of business leaders in the US and UK ranking this their top risk in this category overall, a figure that falls to as low as 7% for the healthcare and life sciences sector, where leaders may believe that reputations have been bolstered by their undoubted contribution to managing the pandemic.