Across industries, the way organisations understand and manage risk is changing. As we explored in last week’s article, senior risk leaders are playing a more strategic role, helping boards and executive teams think more systematically about the risks that could shape the future of the business. But what became clear at a recent MBS breakfast on risk and communications, co-hosted with Signal AI, is that this shift is not confined to the risk function. It is also changing what communications is for.
For a long time, communications was seen as something that came after a decision had been made. A business acted, an issue emerged, and communications was brought in to explain, defend or contain it. Now, operational decisions can become reputational issues almost instantly, and so communications has become part of how organisations understand risk in the first place: what could happen, how it might be interpreted, and where trust could be affected.
“The impact may not show up as immediately as a financial loss, but it can shape trust, investor confidence, regulatory relationships and, over time, commercial performance.”
That looks different depending on the sector. In financial services, aviation and parts of healthcare, organisations already operate within formal risk frameworks as they are required to identify, measure and report a wide range of risks, not only to boards but also to regulators. That changes how risk is understood inside the business as it creates ownership, language, processes and escalation routes.
One communications leader at a major global bank pointed to how reputational risk is now managed alongside market and credit risk within formal frameworks. Market risk might involve movements in interest rates or currencies, while credit risk might cover the possibility of borrowers defaulting. Reputational risk can arise from how an organisation treats its customers, how it handles data, who it is associated with, or how it responds when something goes wrong. The impact may not show up as immediately as a financial loss, but it can shape trust, investor confidence, regulatory relationships and, over time, commercial performance.
Outside heavily regulated sectors, the relevance is less about copying the structures of banking or aviation and more about the shift in mindset. Once reputation is treated as a defined risk, it becomes harder to dismiss as a matter of instinct or judgement alone, and instead, invites clearer ownership, more consistent monitoring and earlier consideration in decision-making. One risk leader in media – a less regulated sector – described reputation as something that sits beneath almost every risk the business faces. The point was simple: if customer trust is lost, it may not be possible to win it back.
“Once reputation is treated as a defined risk, it becomes harder to dismiss as a matter of instinct or judgement alone, and instead, invites clearer ownership.”
This is more relevant than ever because reputational risk rarely comes from a single event in isolation. More often, it emerges from the interaction between operational decisions, external events and changing public expectations. A supply chain decision, a data breach, a pricing change, a leadership comment or an association with a contested issue may not be reputationally significant on its own, but placed in the wrong context, or interpreted through the wrong lens, it can quickly become just that. As one communications leader said, the individual risks in and of themselves are not the only focus, but it’s the combination of different things coming together that create the issues. Risk, in that sense, is shaped not only by what has happened, but by how it is understood.
This is being accelerated by technology. Large language models are rapidly becoming a first point of reference, shaping perceptions by drawing on vast quantities of information from across the internet. Unlike a journalist, an AI system may not distinguish clearly between current reporting, historic information, outdated claims and repeated inaccuracies in the way a person might, nor is there always an obvious route to be able to correct it once a particular version of events has become part of the wider information ecosystem.
“The quality, consistency and accuracy of publicly available information is becoming a strategic asset in its own right.”
This is where AI summaries can become troublesome as they often provide an interpretation, compressing a range of material into a short, confident answer. That answer may draw on recent coverage, older reporting, repeated claims, incomplete sources or information that lacks the context a reader would need to understand it properly. That changes the work of communications, as it is no longer only about responding to individual pieces of coverage, but about understanding the wider information environment from which those summaries are drawn. The quality, consistency and accuracy of publicly available information is becoming a strategic asset in its own right, because it shapes not only what people read, but what AI systems retrieve, summarise and reproduce.
This changing information environment is also altering crisis response. In a crisis, reputational risk is often about speed, coordination and interpretation. The issue is not simply what has happened, but what different groups believe has happened, what they need to know, and how the first response shapes their confidence in the organisation. Communications cannot be brought in only to explain decisions after the fact. It has to work alongside risk, legal and operational teams as events unfold, helping leaders understand how customers, employees, regulators, investors and the wider public are likely to interpret what is happening.
“Several leaders reflected that the harder work is often longer term: understanding which audiences, markets and relationships matter most, rather than being constantly pulled into the near-term.”
Outside a crisis, reputational risk is quieter but no less important. It sits in everyday decisions that reveal what an organisation values: how a pricing change will be read by customers, whether a partnership creates values-based risk, whether a customer policy feels fair, or whether silence on a public issue is interpreted as neutrality or avoidance. Several leaders reflected that the harder work is often longer term: understanding which audiences, markets and relationships matter most, rather than being constantly pulled into the near-term. These are not always moments that generate immediate headlines, but they shape whether an organisation is trusted, whether its decisions are given the benefit of the doubt, and whether future issues are judged in a forgiving or unforgiving context.
In order to adapt to this pace of change, several leaders described a move away from large, slow-moving response groups towards smaller teams with clearer authority, faster escalation routes and scenarios rehearsed before they are needed. The point is speed, but not at the expense of judgement, particularly when there is so much information coming from so many different sources. As one corporate affairs leader observed, it is no longer enough to rely on your own experience to understand what the world is interpreting about your brand. Information is becoming more fragmented and more personalised, which means the organisation’s view of events may not be the view being seen by others.
What is clear is that communications is no longer operating in a world where the facts settle first and the response follows. By the time an organisation has established exactly what has happened, customers, employees, regulators and investors may already have encountered a version of the story elsewhere. That does not mean responding before the facts are known. It means recognising that judgement is now part of the risk itself: what to say, what not to say, what to correct, what to let pass, and how to maintain trust while the picture is still incomplete. The question for leaders is how risk and communications work together in those moments, before reputation is shaped for them.
