Major international firms are underprepared and lack confidence in dealing with risks to their reputation, a new survey has revealed.

The survey — carried out by Forbes Insights for global financial services firm Deloitte — showed that more than two-thirds of companies thought they had strong reputations.

But confidence plummeted to 19 per cent when firms were asked about protecting themselves and responding to a reputational risk.

The worldwide survey of 300 top executives in five major business sectors and locations found that 39 per cent of companies rated their risk management programmes as either average or below average.

But the Deloitte report said that the ability to respond to a reputational challenge was critical to the bottom line and an organisation’s ability to bounce back from a hit to it’s standing.

Companies that had experienced a public battering said that the areas hit the most were revenue and loss of brand value — with both on 41 per cent.

And 37 per cent of business chiefs said regulatory investigations were a major worry — rising to 45 per cent for financial services firms.

Liz Cunningham, Deloitte Bermuda’s actuarial principal, said: “The top underlying drivers of reputation risk were found to be related to ethics and integrity — 55 per cent — such as fraud, bribery and corruption, followed by security risks (45 per cent) both physical and cyber, and product and services risk (43 per cent).”

Ms Cunningham added: “These three drivers are expected to remain the leading factors for at least the next three years.

“Third party relationships are another rapidly emerging risk area as companies are increasingly being held accountable for the actions of their suppliers and vendors.”

Deloitte’s Brett Henshilwood added: “A key success factor for companies today is mitigating reputational risk.

“Negative reputational events can cause financial and brand ramification which we help clients to mitigate through the utilisation of technologies and analytics which help clients to maintain and strengthen brand value.”

The results came as Deloitte was named a leader in global risk management by technology services firm Gartner.

The Gartner report looked at seven global firms and networks on three levels of risk management — framework, metrics and systems.

Ms Cunningham said: “It is a great honour that Deloitte has, once again, been recognised as a leader in global risk management services. In particular, I am pleased that Gartner has recognised Deloitte’s excellence and commitment to serving the financial services industry in this area.”

Mr Henshilwood added: “It is easy to assume being tucked away on a small Island like Bermuda, we are at less risk from cyber-attacks, but cyber criminals operate without borders and organisations within Bermuda must be prepared and ready to respond in the event of an attack.

“Organisations can become more cyber-resilient by understanding the threats they face, detecting a threat at an early stage and having sufficient response plans in place in the event of an attack.”