Reputation risk remains a fundamental threat to organisations. This has only been exacerbated by the implications of Covid-19, with new factors coming to the fore which define a company’s reputation and brand value. In many ways the underlying principle governing this reputational shift is transparency. The corporate veil is lifting. This process had already started prior to the emergence of Covid-19 and is at least part of the reason why the response of businesses to the crisis has been under the microscope and in the public eye.

This has largely been driven by two pressures. On the one hand, the ‘upward’ pressure of stakeholder expectation and on the other the ‘downward’ pressure of regulation. Various legal mechanisms and regulations, from new corporate reporting standards to gender pay gap disclosure have contributed to a climate of increasing transparency, but there is an expectation – from employees to the media – for businesses to go further. They must read the mood of their key stakeholders, and the general public, and communicate, and act, accordingly.

This may mean going above and beyond regulations and the letter of the law in the defence of reputation. Take, for example, those organisations who voluntarily published their gender pay gap reports when government removed the obligation to do so during the Covid-19 crisis, or those who have made the decision based on brand values to either refuse to take or even to pay back public monies received as part of the coronavirus job retention scheme.

It will be those organisations who treat corporate reputation as a critical asset to be both guarded and cultivated that will prove most resilient as the new normal embeds. NEDs have a key role to play. As businesses face up to the simultaneous challenge of increased transparency and scrutiny, stakeholder engagement is vital to ensuring the corporate response is  authentic, responsible and trustworthy. NEDs are well placed and in a unique position to operate as an independent conduit for boards to more effectively engage with their wide pool of stakeholders and influencers ensuring that decisions are not taken in isolation and that reputational issues are spotted and mitigated early and effectively.