Reputation accounts for more than 63 percent of a credit union’s value

Reputation has always been valued, but until recently, it was considered difficult to quantify for credit unions and often overlooked as a tangible risk. Today, reputation has emerged as a critical asset for businesses and credit unions across the country with insurance carriers recognizing its loss as a legitimate risk.

A damaged reputation can have severe and quantifiable financial consequences. Indeed, a significant portion of a company’s overall worth is directly tied to its reputation. According to Global Finance magazine, a World Economic Forum study estimated that reputation accounted for more than 25 percent of a company’s market value. A recent global survey of 2,000 executives put that share at 63 percent.

A tarnished reputation can unleash a series of cascading effects that may affect your balance sheets and long-term viability. Negative publicity, ethical breaches, social justice issues, financial malfeasance or any crisis linked to reputation can lead to a loss of member trust and loyalty. A damaged image may also lead to difficulties in attracting skilled credit union employees.

As stewards and overseers of financial risks, it’s time for credit union leaders to pay attention to reputational risks. 63 percent mindshare is valuable to any business, but critical to a not-for-profit organization that thrives on a good reputation. Play the percentages and enhance and protect your credit union’s valuable reputation now.

As a credit union authority on reputation management, we bridge the gap between reputation and financial implications, enabling credit unions to safeguard their most valuable asset. By understanding the value behind reputation and the ramifications of its damage, credit unions can thrive in an era when reputation is more important than ever before.