The potential for a risk event to damage the reputation of an organization. Reputation risk can come from actions of the firm itself – for example, from a regulatory sanction and fine, resulting from a compliance breach. Reputation risk can also be the result of employee or third-party actions – such as a data breach involving the firm’s customer data. Reputation risk can also be entirely external to the firm, such as a false statement on social media. Reputation risks can cause financial losses as well as losses in market share, employee morale, and in standing with regulators.