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Reputation ranks above profit for directors

A staggering 75 per cent of decision-makers in the finance sector have claimed that their businesses would take short-term profit losses in order to protect their reputations in the long-term.

This suggests that while accountants in Eastham, and elsewhere in the UK, may be seeing their clients’ books show less of a profit than usual, it may just be down to long-term thinking.

The results from a survey carried out by AICPA and CIMA, which saw over 1,300 professionals from the finance sector take part, show there is more of a focus placed on reputation risk than there has been in the past, with almost 50 per cent revealing that they have turned down a project which made financial sense simply because their public image had been at risk in some way.

CIMA’s head of ethics, Tanya Barman, said:

“Organisations are increasingly recognising the need to take reputational risks very seriously if potential crises are not to turn into catastrophes.

“What is very worrying is the revelation that businesses still appear to be struggling with how they go about managing non-financial reporting in this area.”

She went on to say that to achieve full protection, it is crucial for finance leaders and directors to begin making the transition from working on short-term strategies to collating, reporting and tracking information relevant to reputation risk limitation.

The survey also showed a demand for increased transparency. However, more than 95 per cent of businesses admitted in failing to use feedback from such outlets as often as they could to help predict and manage reputation risk.

Posted by Louise
August 6, 2013
Research & Statistics

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