Warren Buffett, CEO of Berkshire Hathaway, said that "It takes 20 years to build a reputation and five minutes to ruin it." Social media only makes that more possible. Still, nearly 90 percent of senior executives are confident that their organizational resilience to reputation and environmental, social, and governance (ESG) issues is good or very good, according to the Are Businesses Reputation Risk Ready? report.

For the report, global advisory, brokering, and solutions company WTW (formerly Willis Towers Watson) surveyed 500 global senior executives who are responsible for risk strategy. They came from companies from a variety of industries across 20 countries in five continents.

Despite executives' confidence, WTW reports that it may not be justified. "In an increasingly digital, service-oriented economy, reputational risk is firmly on the corporate agenda. However, our findings also suggest that organizations may have failed to accurately assess the length and depth of a potential crisis," says Garret Gaughan, head of global markets direct and facultative at WTW.

Three-quarters of senior executives say they have a comprehensive or extensive knowledge of their organizational reputation, and the majority report engaging with stakeholders at least on a quarterly basis. Among reputation risks of most concern, they rate employee and customer abuse (such as racial or sexual discrimination) and ESG risks (such as pollution or corruption) highest. Only one-quarter are concerned about a cyberattack. The report cautions, though, that if companies don't manage a cyberattack, they could take the blame for corresponding damages.

The surveyed executives also believe their companies are prepared should a crisis arise—the majority have a formal plan in place, have taken a moderate assessment of risks, and have established a crisis response team to train and practice for adverse events annually. However, WTW found that 40 percent of leaders think their teams only have a slight to moderate understanding of the life cycle of crises.

Talent development professionals can help ensure leaders' perceptions of preparedness and resilience are reality by leading awareness and skills training.

"Organizational training, policies, and procedures can ensure that all employees know how to behave and respond appropriately in any situation. When reputation is at risk, employees must act quickly and responsibly while doing anything within their power to positively influence public ideas," writes Rebecca Webb in the article "6 Ways to Manage Reputational Risk." She advises companies to know stakeholders', customers', and employees' expectations of the organization; develop response and contingency plans; and, in the midst of a crisis situation, stay focused on communicating clearly and establishing a positive image.