REPUTATION RISK: THEORY REVIEW AND VALUATION APPROACH

The aim of this paper is to review the concept, size, scope, determinants, causes and consequences of reputation risk, focusing on key issues and guidelines for the identification and management. It highlights that success in this field can only be achieved through integrated actions that involve the whole organization at all levels, with intensive efforts in control and early detection, in order to discover potentially harmful events, followed by implementation of relevant actions designed to minimize damage, and potential opportunities to obtain a positive differentiation. In addition, the goal is to make a first approach to a measure of reputation risk, based on a robust mathematical methodology, with multiple and significant applications in the field of finance: partial differential equations, combined with outstanding results of stochastic calculus.