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‘Managing reputational risk, compliance and governance’


Rand Merchant Bank Nigeria

The Executive Director and Chief Risk Officer of Rand Merchant Bank (RMB) Nigeria Limited, Peter Blenkinsop has said that effective management of both organisational and personal reputational risk is key to sound compliance and corporate governance in Nigeria’s and the banking sector.

Blenkinsop who made the observation in his keynote speech at the November 2017 Monthly Meeting of the Association of Chief Compliance Officers of Banks in Nigeria (ACCOBIN), added that these shape the future of any organisation.

His paper, titked: “Managing Reputational Risk”, he noted FirstRand Group’s “informal” take on reputational risk defines it as “the risk of reading what you don’t want to read about yourself in the newspaper.”

According to him, a bank’s approach to managing reputational risk should be no different from managing any other risk faced by banks in the operations of their banking business.

He said banks should therefore define their reputational risk appetite by defining the boundaries of what they believe to be acceptable performance in this class of risk.

This also applies to product roll-out and product performance (perception vs. what is actually delivered) as much as it does to behavioural aspects.

He further mentioned that banks should pay special attention to what he called “values/character-based reputational risk”.

“If this materializes, this leads to perceptual organisational loss or destruction of shareholder value, which ultimately leads to financial loss,” he said.

This, he noted, is much more difficult to recover than financial losses as it is that “silent killer” that is difficult to fully manage, adding that executives of banks need to look hard at themselves and ask: If my staff listen with their eyes, what do they see? Am I a living example of how I want my staff to portray to manage my brand both at work and in my private life?

The banker advises that management of reputational damage needs to be addressed at both internal and external perceptual levels, noting that for a sound corporate governance, all banks should work to vest an organisational culture where the board, executive management and employees align with the bank’s stated values and ethical risk appetite to achieve long term business success.

He further tasked all banks to be honest in the evaluation of their board’s and executive management’s performance as far as reputation and ethics management is concerned, and also to be honest about their own contribution to the organisational health in this regard.

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