It's a whole new ballgame when it comes to protecting a business' reputation, according to Steven Minsky, CEO of enterprise risk management software provider LogicManager.

While regulators may be struggling to keep up with the times, the public isn't feeling quite so constrained. As the recent Facebook debacle shows, consumers and investors can swiftly throttle a business' reputation when they suspect the company isn't playing by the rules. "Companies are operating in what I call the 'see-through economy'—a dizzyingly, fast-paced age of transparency where consumers and investors are empowered by new technologies to impact a company’s reputation," said Minsky, who recently authored the study, The State of Risk Management in 2018.

Minsky believes that consumers and investors in the see-through economy don't view scandals as one-off mistakes, but as examples of repeated patterns of risk management negligence. "The first thing to suffer in a corporate scandal is a company’s reputation," Minsky advised. "This reputational damage negatively affects consumer demand for their products and impacts a company’s market value with near-immediacy."

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