Balancing reputation and risk: The role of today’s corporate affairs director

In today’s geopolitically sensitive, volatile economy, trust is the ultimate differentiator.

Research from PwC finds that 93% of executives believe fostering and maintaining trust is directly correlated to the bottom line.¹ The 2025 UK Reputation Valuation Report reveals that reputation accounts for ~29 % of FTSE 350 market value (≈ £730 bn).²

Historically treated as a defensive PR function, reputation today is a value-creating asset class, a reservoir of trust that stabilizes organizations through transformation and crisis. Yet reputation remains one of the most misunderstood corporate assets. CFOs track financial capital, CHROs manage human capital, but few organizations apply the same rigor to reputation capital.

To meet this need, corporate affairs directors are increasingly required to act as strategic and commercial vanguards of reputational risk. In doing so, these Directors must embrace a cross-functional role, deploying integrated capabilities across communications, government affairs and marketing in order to keep their business ahead of rapidly evolving news cycles and reputational risks created by shifting geopolitics.

In a world where cooperation is eroding, business resilience and reputational strength are emerging as essential engines of adaptive performance. This requires corporate affairs to be an established member of the senior leadership team.

Why reputation creates value 

Reputation is not just a shield, it’s a growth engine:

• Pricing power: Trusted brands command premium pricing.
• Talent magnetism: People join companies where values are lived.
• Investor confidence: Governance and credibility shape capital flows.
• Regulatory goodwill: Integrity earns lighter-touch oversight.
• Resilience: High-trust firms recover faster from crises.

The mantra “planning is cheap compared to fixing mistakes later” applies to reputation. Organizations that invest early in structured reputation strategies, benchmark against comparable crises, and rely on proven playbooks dramatically reduce exposure to reputational risk. Reputation is therefore an intangible asset with tangible consequences. When trust erodes, markets respond swiftly and severely. 

Reputation is also a measurable factor in M&A, where due diligence increasingly integrates brand equity, stakeholder sentiment, and crisis history alongside financial, legal, and regulatory risk.

M&A due diligence provides a useful framework for quantifying reputation. Analysts combine structured financial data with unstructured data (social media, news feeds, customer reviews) to look at brand equity, stakeholder sentiment, litigation frequency and severity, and crisis history. This is monitored throughout valuation to provide a clear view on intangible assets.  Reputation risk is viewed with the same critical lens as financial, legal and regulatory risk. Issues can delay transactions, reduce deal value, or cause deal collapse. 

All of this means that reputation must be well-considered in leadership conversations around organizational strategy and operations. This is ever more important as  lead companies to boost oversight from boards and senior leadership to deal with these complexities, especially around policy shifts, trade disruptions and regulatory volatility.

Forward thinking businesses are adopting an enterprise risk management (ERM) framework that positions Corporate Affairs as a strategic integrator rather than a peripheral communicator. This model treats reputation as a cross-cutting risk category, linking financial, operational, regulatory, and social dimensions. Corporate Affairs becomes the hub for stakeholder intelligence, scenario planning, and trust analytics, feeding insights into board-level risk registers and strategic decision-making.

What this means for leadership

As reputation becomes a driver of value, and geopolitical volatility reshapes the risk landscape, boards must rethink what they look for in senior Corporate Affairs leadership.

The role is no longer defined solely by communications excellence, but by the ability to operate at the intersection of strategy, governance and external risk.

The new board-grade corporate affairs leader

The most effective corporate affairs directors increasingly share the following qualities:

Strategic integration

Corporate Affairs leaders must act as strategic integrators, able to connect geopolitical developments, regulatory shifts, media narratives and stakeholder sentiment into a coherent strategic view. Rather than operating in functional silos, they translate external complexity into insights that inform enterprise-wide decision-making. As my colleague Julian Ha has noted in his recent article on government affairs leadership, this requires extensive collaboration and coordination across a host of functions—from risk, to finance, to marketing and branding. Experience working across a range of sectors, and with a cross-functional group of colleagues, allow candidates to bring broad perspective and varied stakeholder lens to the board table. 

Commercial and financial acumen

Boards now expect Corporate Affairs leaders to understand how reputation shapes valuation, capital flows, M&A outcomes and risk pricing. Experience working alongside CFOs, deal teams or risk committees, particularly in periods of transformation, is becoming more important. 

Geopolitical and policy literacy

In an era of trade fragmentation, sanctions, regulatory activism and political volatility, effective Corporate Affairs leaders bring deep policy awareness and geopolitical judgment. Many have backgrounds spanning government affairs, public policy, international markets or regulated industries, enabling them to anticipate second- and third-order risks.

Board-level credibility and governance fluency

This role increasingly interfaces directly with boards and executive committees. Leaders must be comfortable contributing to risk registers, scenario planning, and crisis simulations, and advising on issues where reputation, regulation and strategy converge.

Crisis leadership and judgment under pressure

Beyond communications skills, boards value leaders who have navigated high-stakes crises, activist scrutiny, or complex transactions, and who can maintain trust, clarity and decisiveness in the face of such challenges.

Conclusion 

Reputation is not a soft metric, it is a hard driver of valuation, resilience and long-term performance. For CEOs, it is the currency of competitive advantage; for boards, it is a governance priority that demands the same rigor as financial and operational risk. Stewardship of trust requires deliberate leadership from corporate affairs directors: embedding reputation into enterprise risk frameworks, mandating data-driven dashboards, and ensuring Corporate Affairs has strategic authority at the top table.

About the author

Hannah Peech (hpeech@heidrick.com) is a principal and leads the Corporate Affairs & Communications Practice in Europe, the U.K., and Africa; she is based in the London office.

References

¹ “2024 Trust Survey,” PricewaterhouseCoopers, March 12, 2024, pwc.com.
² “UK Reputation Valuation Report 2025: Beyond Perception: The True Market Power of Reputation,” Echo Research, July 24, 2025, echoresearch.com.