Issue Spotting: 5 Reputation Risks You Might Be Missing

Not all reputation threats come with red flags or breaking news. In fact, the most damaging crises are often the ones that build quietly while no one is paying attention. The small comment from an executive, the internal policy no one questions, the data practice that’s legal but a bit in the gray. These are the slow burns that can ignite into full-blown reputation fires.

At our firm, we help organizations see what others miss. Below are five reputation risks we often find slowly simmering…subtle today, potentially explosive tomorrow.

Risk #1 Ethical Gray Areas That Go Unchecked

Ethical lapses rarely start with blatant wrongdoing. More often, they begin as gray areas that go unchallenged like a leadership perk that doesn’t feel right to employees, a vendor relationship with conflicts of interest, or a marketing claim that stretches the truth. A recent example is Nestle, the world’s largest food manufacturer, who quietly adjusted its ambitious recycling goals and came under fire for it. The company altered its commitment to using 100% recyclable or reusable packaging by 2025, changing the goal to packaging "designed for recycling." This semantic shift was seen as a step back from genuine environmental responsibility, leading to accusations of greenwashing.

A small word change that was done quietly become a reputational nightmare. Public expectations of integrity are higher than ever. Consumers and employees alike expect transparency and accountability, and ethical missteps can spark swift backlash. Be on the lookout and take inventory of ethical areas that may pose risk to your organization.

Risk #2 Employee Activism and Employer Silence

Today's employees are more vocal than ever about everything from internal culture to how their organizations engage with the world. When companies stay silent on issues employees care deeply about like social justice, climate, diversity, etc., it can cause internal tension and external reputational damage.

After the 2023 Israel-Hamas conflict began, many companies, colleges and universities struggled with how, or whether, to communicate internally. Some saw employee walkouts and public resignations over how statements were handled or avoided. Internal dissent can quickly leak, fueling media stories, Glassdoor reviews, or social media movements.

While the tide is always changing on if employers should take a stand on issues or not ultimately it comes down to knowing your employees and your company’s values. Make sure you have a framework to guide your decision to take a stand, or not, and that you’re monitoring early indicators through internal surveys, feedback loops and communicate transparently about values and decisions.

Risk #3 Data Practices That Don’t Meet Expectations

Data-driven marketing and AI applications are under a microscope. Today, consumers are giving their information out at almost every turn. But it’s not just what data your organization is collecting it’s how you’re using it, and whether customers expect you to use it that way. If you don’t know your company’s data practices, you need to. Even when companies are following privacy laws, poor communication about data usage can trigger consumer mistrust. Trust is fragile, and one misstep can draw media attention or class action lawsuits. Make sure you communicate how data is handled in plain language!

Risk #4 Inconsistent Internal and External Messaging

When your internal culture doesn’t match your public positioning, cracks begin to show. Employees notice and eventually, so does the media. Case in point is Target and their recent DEI actions. Audiences are quick to call out performative behavior. Your values can’t just live on your website, they must be lived throughout your organization. Discrepancies between what your company says and how it behaves internally often lead to whistleblowing, leaks, or reputational drift. A good rule of thumb is to continually audit statements versus operations to ensure consistency before launching values-based messaging.

Risk #5 Leadership Decisions That Ignore Reputational Costs

Sometimes, leaders make decisions based on short-term business goals without weighing the reputational costs. That might mean mass layoffs by email, political donations misaligned with brand values, or tone-deaf public comments by leaders during a sensitive time. A classic example of this is the CEO of Better.com who laid off 900 employees via Zoom. A reputational nightmare that dominated headlines for weeks and eroded trust with both customers and remaining employees. Public perception of your leadership’s values shapes your brand especially during difficult decisions.

Be Proactive, Not Reactive

Spotting risks before they become crises requires discipline and structure. Today’s reputation risks are nuanced and fast-moving. When it comes to reputation, what you don’t see can hurt you most.

Our team can help, providing you with a free risk assessment checklist to evaluate your level of risk. Reach out to us today for the checklist.