By Mark Forbes, Director of Reputation, Icon Agency (ICON)
It’s not even three months into 2026, and it’s clear that reputation-rending crises will be a feature of the year.
We’ve already seen the aftermath of the Bondi terror attack hit reputations across the board, and cause the cancellation of the Adelaide Writers Festival - after it cancelled the appearance of an author with pro-Palestinian views.
Coles is defending an ACCC action over flogging ‘fake’ price cuts. KPMG is dealing with AI-inflicted damage after members of its Australian team were exposed using AI to cheat (just after releasing a report on AI fears). Regulators are investigating the collapse of the Shield & First Guardian superannuation scheme, which saw $1.2 billion in members' savings disappear.
Globally, the fallout from the Epstein files reverberates, most spectacularly in the UK with the arrest of the man once known as Prince Andrew, and Prime Minister Keir Starmer’s leadership is tottering due to his appointment of an Epstein associate as US ambassador.
For prominent organisations it’s not a question of if, but when, the next crisis will come. Directors are quickly upgrading governance processes, booking crisis training and combing risk registers to anticipate where the next crisis will hit.
So what are the biggest reputational risks for 2026?
1. Friendly fire
A crisis is more likely to come from inside your organisation than an external threat; an unthinking comment from the CEO, affairs within the leadership team, improper behavior by staff. Most companies seeking crisis management preparation come with a list of risks, almost without exception, they are entirely external, while the most serious wounds are often self-inflicted.
Boys (and girls) behaving badly is the largest reputational risk, firms need clear processes covering staff conduct and relationships between staff, ensuring standards apply to the very top. And expect a ‘please explain’ from investors (especially the super funds), if governance issues go public.
To properly prepare for a crisis, look from the inside out.
2. AI and the absence of trust
Trust is a core brand asset, increasingly eroded by public and regulatory scrutiny. And AI is supercharging this erosion, with generated fakes making us question authenticity.
Last year Deloitte had to apologise for an AI-written, error-strewn $400,000 government report. KMPG is in the throes of an AI scandal, and with Australian businesses deploying autonomous AI agents to manage customer service, an AI-driven consumer law crisis is only a matter of time.
Trust is no longer just a desirable brand sentiment, it is a crucial filter for AI’s Large Language Models, which have overtaken conventional search in defining facts and reputation. AI now acts as a reputational stakeholder and its systems are programmed to prioritise information that carries ‘credibility cues’, such as clear sourcing, named experts, consistent facts and trusted third parties.
Monitoring and responding to how your organisation presents via AI is a critical reputational tool.
3. Climate exposure
Aside from the physical consequences of global warming, stakeholder and regulator expectations are a reputational danger as new climate disclosure laws invite intense scrutiny.
The extent of those disclosure requirements, in force from this year, are only just being understood, especially Scope 3 emissions, which extend to measuring emissions across entire industry supply chains - the National Farmers Federation is running a fear campaign about the costs for farmers to collate the data.
Companies will have their emissions reductions targets, plans and performance publicly exposed, putting claims of sustainability to the test and forcing responses to allegations of ‘greenwashing’, although Santos just dodged a greenwashing bullet as their ‘clean gas’ claims were judged ‘aspirational’.
Corporates are on notice that sustainability claims must at least be reasonably based.
4. Hyper accountability
Scrutiny and accountability are supercharged in 2026, with intensified expectations around behavior, ethics, and purpose - particularly among younger generations, with social media providing the platform to generate unrest and action.
Leaked emails, internal complaints, poor behaviour towards customers or communities, or poorly handled workplace issues can quickly become viral flashpoints, and the spark can be lit from within.
Those who underestimate the influence of community activism or shifting generational expectations risk a sustained loss of trust, talent, and social licence to operate.
Reputational resilience depends on anticipating social pressure and embedding ethical accountability.
5. Communication failure
It’s the crisis response that can cause the greatest reputational damage - dealing with the fallout and demonstrating regret and rectification. Remember the former Prince Andrew’s train wreck “I don’t sweat” response to the Epstein allegations?
When Monash IVF managed to put an embryo into the wrong patient last year, they stated it was an isolated case, only to have another mix up exposed two months later. They also fell into the ‘partial transparency trap, announcing an independent investigation, then refusing to release it.
Rebuilding trust is crucial in crises, transparency and accuracy are essential.
2026’s reality is that crises in Australia are increasingly networked, emotionally charged and unfold rapidly across channels you don’t control. The speed of crises demands an equally rapid response, which is why preparation for these risks is essential. No one is crisis proof, but you can be crisis ready.