Editor’s view: Getting to grips with intangibles, the interactive way

One of the challenges facing risk managers is managing the ‘untouchable’.

The high-tech boom has meant the value of many companies is now largely made up of non-physical resources such as reputation, data, intellectual property – the intangible assets.

Until recently, the main stock value of a company was in its physical assets – property, plant and machinery. But in today’s globalised world, value is increasingly found in more nebulous assets. In fact, 80% of a corporate’s most valuable resources are non-tangible.

As AIG’s cyber leader Mark Camillo put it in a recent interview with StrategicRISK, “Some [businesses] will have nothing but intangibles on their balance sheet.”

It is no wonder the principal risk that could threaten this 80% – reputational damage, which, according to the World Economic Forum accounts for 25% of a company’s market value – tops the list on a risk manager’s risk register.

However, this figure is likely to be far higher in a highly connected world, where a proliferation of on-the-go WiFi technologies connects customers and stakeholders across the world, so that reputations can be globally attacked with just a few taps of a smartphone.

FERMA president Julia Graham makes an interesting observation in our article about the recent Alton Towers rollercoaster crash, which injured 16 visitors, two of whom had to have lower leg amputations.

“One of the things we saw was people taking pictures on their smartphones. It wouldn’t have happened 20 years ago,” she says.

The incident is a cruel reminder of how an accident involving customers can be shared in a matter of seconds on social media, causing a company’s reputation to collapse if the situation is not handled carefully.

The challenge, as many risk managers have told me during the third quarter of this year, is that there is no clear method for identifying and measuring reputation risk.

That is why we have developed an event dedicated to managing intangible risks. Our inaugural Intangible Risk Briefing will be held on 3 November at the Tower Bridge Hilton, London.

Discussions on how you can make the intangible tangible will take place at this exclusive event for members of the new SR100LIVE. Sessions – or ‘hot spots’ – on managing reputation risk and valuing intangible assets will certainly provide much food for thought.

If you haven’t yet signed up, there is still time. Further details can be found here.