The rise of social media and a new focus on company behaviours mean finance leaders are now paying much closer attention to assessing possible risks to their company's reputation, with three out of four saying they would prioritise long-term reputational issues over short-term profit.

A survey of 1,300 finance leaders by CIMA and AICPA (American Institute of CPAs] identified the demand for more transparency, competitor reputational failures and the rise in social media such as Facebook, Twitter and LinkedIn as key contributing factors.

Three quarters (76%) of those polled said their company was prepared to lose profit in the short term for the sake of protecting its long-term reputation, with the same proportion reporting they placed more emphasis on reputational risk today than in previous years.

Almost half (44%) said they had rejected a project that made financial sense because the reputational risk was too great, and nearly a quarter reported experiencing reputational failure in the past.

However, over 95% of organisations said they did not always use the feedback from social media channels to help them anticipate and manage risk to their reputation, and most (62%) had no formal processes or models in place for calculating the financial impact of not managing reputational risk.

Tanya Barman, head of ethics at CIMA, said: 'In order to be fully protected, it is vital for finance directors and leaders to start moving away from focusing primarily on the short term and to begin collecting, reporting and monitoring reputational risk information. This will not only enable them to performance manage an important aspect of their business, but will also be crucial for long term sustainability and helping to maximise opportunities and to minimise risk.'