Selecting Tools and Controls

The tools and controls for measuring reputation risk are unlike the tools and controls for many other risks. Most risk reporting employs a four box grid or matrix based on the two critical indicators: severity of damage (cost impact) and probability of occurrence (imminent likelihood) (See Figure 4.1). As has already been explained by Nassim Taleb in Black Swan a failure to appreciate the low probability risks can be dangerously deceptive.