From #MeToo to lending to gunmakers, from compliance issues to cyberhacks, from questionable marketing practices to persistent gender inequality — political, economic, and social issues are all directly impacting bank operations and reputations like never before.

Moreover, the rules appear to be changing in real time. Where the "Boom Boom Room" was an aberration that took a long time to be taken seriously and then addressed, today almost any whiff of sexual harassment will find bankers on the curb in a nanosecond, as the public's tolerance for such behavior is plummeting.

Yet new studies are telling us that even after a crisis of major proportions, most companies' share price returns to normal valuation in months. (Note how quickly Equifax rebounded after its massive hack.)

So, what is the difference between a reputational hit that ends up being just a blip, and one that becomes an extinction level event? Following are five ways to assess your exposure.

1. Is the crisis narrative-driven?

Today, stories are the jet fuel of crises. Personal narratives, whether anonymous or named, and even whether true or false, have enormous power on social media. Especially if the narrative is accompanied by video or an audio recording, even more sophisticated readers will turn credulous when they hear a story that pulls at their heartstrings or inflames their rage. And reputations will suffer.

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So think before your act: Will this spur negative reactions on the part of your customers? And if so, think again. The way to mitigate reputational risk is to build in great customer stories, great word of mouth, and great good will. These may be intangible assets, but in today's information-obsessed world, they help protect you in some highly tangible ways.

2. What are the prevailing winds?

There used to be something called the "wave theory" of journalism and crisis — where issues surfaced in waves of popularity, were partially addressed, then faded into the background, only to resurface (if left unresolved).

Today, crisis has almost become stylish, and different crises are in vogue at different times. If your crisis is in vogue, or worse, you are the leader of the class, you are more at risk. So don't dig your heels in. Rather, capitulate sooner, take your medicine, and then move on. Leave the bleeding to someone else.

3. Is it a first-time mistake?

In America, we tend to love the comeback kid. As long as the proper kind of repentance is shown for a mistake, even a serious one, we have a national tendency to forgive and forget. But only if it doesn't happen again.

Make the same mistake twice, after publicly promising not to, as with Wells Fargo, and all bets are off. This, depending on the severity, could really foretell an extinction level event. So, leaders beware. You may think no one is looking, or if they are, they don't care. But if you try to justify your actions — instead of apologizing and ensuring you never make the same mistake again — you run the risk of losing public trust forever. Trust is hard-won, and easily lost. Cherish and protect it.

4. How soon did you announce solutions?

The quicker you put solutions in place, the less chance a crisis will spiral out of control. But denial is a basic human instinct, and everyone, including CEOs and board directors, tends to want to ignore the early stages of a problem. Don't. The sooner you act, the sooner the risk is mitigated.

5. Will a short-term financial hit help you avoid a long-term one?

These days the public appears to want to see its leaders bleed before they are forgiven. Reciprocity is critical. This is what was going on when Facebook CEO Mark Zuckerberg was called in front of Congress. The three-ring circus, and Zuckerberg's discomfort, needed to be commensurate with the perceived crime. Then, once he had suffered enough, and promised to do better, it was as if his debt had been discharged.

If you're willing to do that — and, in general, to recognize, own up to, and fix your shortcomings — you have a far better chance of saving not only your reputation, but your company as well.

Davia Temin

Davia Temin

Davia Temin is the chief executive of Temin and Co., a New York consultancy focused on reputation and crisis management.

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