Why is risk management necessary?

Brands are key assets and a source of value and growth for organisations. Their financial value as a manageable asset is recognised by the International Accounting Standards.

In an environment that is ever more complex, volatile and uncertain, the risks to which brands are exposed increase significantly and they have the potential to compromise the results and normal operations of the business. This is why ascertaining and mitigating the threats faced by your brands, including their economic impact, is key to ensuring their performance.

Paradoxically however, companies barely identify, measure or manage brand risks beyond those affecting reputation – which moreover is a consequence and not a cause – meaning that they remain exposed to various risks whose impact is liable to have unforeseen consequences.

It is important that the various risks to which brands are exposed should be properly categorised, delving into the actual chains of causation, establishing plans to offset their impact if they occur and to ensure coverage.

Current models fail to envisage the risks affecting brands in a comprehensive and exhaustive way, with the consequence that it is necessary to have specific, advanced and usable tools that do a better job at safeguarding brands’ future value and performance.