Good piece on CFO.com today on repetitional risk, something I get asked a lot about but is still kind of hard to nail down sometimes. This reference to the the work of Prof. Robert Hoyt, is a nice way to thin about it:

Robert E. Hoyt, a professor of risk management and insurance at the Terry College of Business at the University of Georgia, observes that a good deal of research has been done on reputational value. “The issue has taken two tracks,” he says. “One track is to measure reputation through the satisfaction of stakeholders — a qualitative approach.” The second and more reliable perspective, he says, is to “ascribe an intangible value to reputation — a thing beyond the hard physical aspects of a firm.”

Some of the research has looked at whether a firm has “a high valuation relative to its tangible assets or to the hard revenues the firm is currently generating. That additional valuation would be ascribed [in part] to reputation,” says Hoyt. While reputation is but one aspect of that value, “the literature has typically said it would be arguably highly correlated,” he adds.

Full text here: http://www3.cfo.com/article/2012/5/risk-management_reputational-risk-risk-and-insurance-management-society-varian-university-of-georgia-marsh

http://www3.cfo.com/article/2012/5/risk-management_reputational-risk-risk-and-insurance-management-society-varian-university-of-georgia-marsh

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Posted by Carlos Alvarenga

Carlos A. Alvarenga is the Executive Director of World 50 Labs and Adjunct Professor in the Logistics, Business and Public Policy Department at the University of Maryland’s Robert E. Smith School of Business.

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