Reputational risk occurs when a company's actions, behaviors, or decisions result in damage to its reputation, leading to loss of trust and credibility from customers, investors, and other stakeholders. This can be caused by issues such as unethical business practices, poor customer service, product failures, data breaches, or negative media coverage. Reputational risk can have serious consequences for a company, including loss of business, regulatory scrutiny, lawsuits, and long-term damage to its brand and reputation.
