Elon Musk ‘associated' and AI top list of biggest business risks, report finds
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In an effort to tiptoe the reputational path in a highly uncertain business environment, such as the current geopolitical landscape, companies must watch out not to be associated with or criticised by Elon Musk, as these are among the top reputational risks.
This is according to a new Reputation Risk Index, commissioned by public relations firm Global Situation Room, using data from crisis experts and analysis from the Global Risk Advisory Council.
The council counts more than 100 members, including the likes of former CIA Director Leon Panetta and MI6 Chief Sir Richard Dearlove as well as former heads of state and CEOs.
What they foresee as the biggest emerging threats to a company's reputation was sculpted into a list of 10 risks, forging a quarterly Reputation Risk Index, which promises to help enhance executives' ability to track and analyse emerging threats.
Misusing AI tops the list
Corporate reputation is most severely threatened if a company is, even loosely, associated with using artificial intelligence in a harmful or deceptive way, including creating deepfakes. This practice is often associated with spreading misinformation and manipulating public opinion. 'AI, if not understood or managed in companies, can have an incredible trickle-down effect that may not be reversible,' an unnamed Council member said, cited by the report.
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'The use of AI continues to be the greatest risk to brands, with little restrictions and legal parameters, giving unscrupulous brands a leg up, while penalising organisations who remain diligent and cautious about its deceptive potential for misleading consumers,' the Council said in the risk report.
Furthermore, the risk AI carries for reputation is expected to 'potentially increase in the years to come,' the report added.
Avoiding links to the world's richest man
Tesla CEO Elon Musk, named the world's richest man for several years now, appears to be a less-than-welcome acquaintance; it is highly likely that the connection would trigger heightened scrutiny for a brand, according to the Risk Index.
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Musk, who also bought Twitter, then named the social media X, is seen as a controversial figure by many. It is especially so since he aligned himself with US President Donald Trump during his campaign and later became the unofficial head of DOGE. He also had very negative news coverage around the world during the first quarter of 2025.
Now, nearly 30% of Council experts rated the highest risk was being linked to the businessman or publicly criticised by Musk. This rating gave him the second-highest rating on the list.
Other top risks
Perceived backtracking on diversity, equity, and inclusion (DEI) commitments was the third top risk for brands. 'This comes as the Trump Administration continues to aggressively pursue not only universities, but also private firms for the implementation of such programs,' the report read.
One in five Council members rated DEI backtracking as a severe reputational risk. The head of the Global Situation Room (GSR), which commissioned the report, said bowing to political pressure in the short term may prove to be costly.
'The Index has an unambiguous warning for CEOs: If you squander stakeholder and consumer goodwill on these issues, it won't be coming back anytime soon,' GSR President Brett Bruen said.
The Council also sees this trend outside of the US, saying that 'DEI backtracking is notable in Europe.'
Other issues harming corporate reputation included copying creative works, allegations of anticompetitive practices and price fixing.
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Why is it important to keep an eye on emerging risks for the corporate world?
The reputation of a company or organisation has a sizeable impact, as Tesla's example shows. There have been a lot of attacks on the EV makers' showrooms and cars across the US and even abroad, since Musk was appointed to oversee a new Department of Government Efficiency. The share price of the company traded at $254 on 15 April, whereas it was worth $479 on 17 December, 2024.
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In these times of uncertainty, sprinkled with tariff news every day, the Risk Index aims to give guidance for corporate decision-making in the months and years to come.
'Too often companies make decisions without fully accounting for rapidly changing social, political, and consumer realities,' Isabel Guzman, newly appointed chair of the Global Risk Advisory Council, said. She also called the current climate an 'extremely challenging marketplace and communications environment' in which 'understanding and adapting to these conditions will increasingly be critical in the coming years.'
An overwhelming majority, 86% of the Global Risk Advisory Council, believe reputational risks will increase over the next quarter.
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As for the next few months, the Council is going to monitor reputational risks related to technology, DEI, and geopolitical uncertainties, including the shift from traditional US policies, added the report
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