Which factors can significantly affect reputation risk?

The chosen answer highlights two crucial components that can significantly influence reputation risk: levels of public confidence or trust and brand management.

Public confidence and trust are foundational to an organization's reputation. A company that has earned the trust of its stakeholders is likely to enjoy a positive reputation, while any breach of trust, such as unethical practices or failures in product quality, can quickly damage that reputation. Additionally, brand management plays a pivotal role as it encompasses how a company communicates with the public and how it positions itself in the marketplace. Effective brand management involves creating a favorable image and consistently delivering on promises made to customers, which directly impacts the perception of the company.

The other factors in the options provided, while relevant to business success, do not directly address the core elements of reputation risk. Public perception and internal policies are linked to reputation but do not capture the direct relationship between trust and brand management as effectively as the selected answer. Marketing expenditure and product pricing are more operational considerations that can impact sales rather than directly shaping reputation risk. Industry regulations and competitor actions are external factors that can influence reputation, but they lack the immediacy and direct influence on public perception compared to trust and branding.