This is the risk that the firm or organization is impacted or suffers loss from negative opinion among clients, employees, general public, business community and/or government bodies/regulators. The negative opinion usually arises from a specific event or series of events – usually of the organization’s own doing.

This can be a Consequential Risk Issue due to the occurrence of business or risk issues.

Reputation Risk can however also arise due to the actions of other companies or competitors in a firm’s industry or actions a parent or shareholder (refer Shareholder Risk).