A new survey of more than 150 public affairs leaders found that the single biggest threat to a company's reputation is misusing artificial intelligence. It ranked higher than being accused of putting children at risk of mental, emotional or physical harm. Sit with that for a second, because the people answering these questions certainly did.
The Pecking Order of Corporate Panic
According to The Guardian, the quarterly Reputation Risk Index was released Tuesday by the Global Risk Advisory Council. It surveys former heads of state, government ministers and senior executives from more than 20 countries across five continents, all invited after proving their chops in handling crises.
Misused AI landed at number one. Accusations of endangering children came in behind it, along with infringing on individuals' sensitive information. Unethical or illegal behavior to gain an edge or turn a profit, and plain old bad strategic decisions, rounded out the top five.
Now, to be fair, this measures reputational risk, not moral weight. It tells you what executives fear will tank their stock price, not what they think is worse. But that distinction is doing a lot of work, and nobody in the corporate world seems eager to examine it.
Everybody Loves the Efficiency, Nobody Trusts the Machine
The respondents, per The Guardian, see real promise in AI for "organizational efficiency." They also see it "accelerating safety and data concerns, hacks, fraud, straining privacy protections, upending the workforce, and dragging companies into court as lawsuits increasingly link AI products to real-world harm."
Read that list again. That is the same technology. The same product delivering your quarterly productivity bump is also getting you sued, hacked, and fired from the public's good graces.
Council chair Isabel Casillas Guzman put it in careful, press-release terms. "As AI is rapidly deployed for productivity gains, we have also seen diminishing public trust in the technology," she said in a statement. Translation: companies bolted the thing onto everything, and customers noticed.
The Council Gets Nervous
Here's what's actually new. AI misuse has topped this list repeatedly since the index launched in April 2025, The Guardian notes. What changed is the tone. The council attached an advisory telling business leaders to "take immediate and decisive action to mitigate potential long-term brand damage."
They went further, calling the technology a "clear and present danger to public confidence for many corporations." That phrase usually shows up in conversations about terrorism, not chatbots.
Guzman urged companies to "deploy preventive tactics now." Which is a polite way of saying the horse has left the barn, and some of you are still building the barn.
Meanwhile, the Iran War Slipped Down the List
The previous edition, released in July, ranked supply chain problems, divisive political stances and other fallout from the war the Trump administration started in Iran alongside Israel as the top reputational risk, according to The Guardian. This time it dropped out of the top tier.
The war did not end. Per The Guardian, it has remained unresolved since it was launched in February. Guzman said the geopolitical shock "hasn't gone away, but its first, sharpest reputational blow has faded, and the conflict has slipped out of the top tier even as it grinds on."
Think about what that means. A war that is still grinding on has become background noise to the C-suite. Corporate America looked at an unresolved military conflict and decided it was old news. That's how fast the anxiety budget moves.
A New AI Czar Arrives Right on Schedule
Guzman published her message two days after the Trump administration named a new AI czar. The Guardian reports it's director of national intelligence Jay Clayton, who previously told federal lawmakers that AI was a "gamechanger" but also posed "a threat."
Trump announced the appointment in a social media post, saying Clayton would oversee an entity coordinating "the federal government's engagement with consumers, public interest groups, religious organizations, critical infrastructure providers, and" AI tech companies.
Notice the order of that list. Consumers first, tech companies last, with religious organizations apparently getting a seat at the table. Whether that ordering means anything is anyone's guess. What it does mean is that the person nominally in charge of coordinating all of it already holds a day job running American intelligence.
The Dingo Take
Officials keep telling us AI is a gamechanger being managed responsibly, and the facts in this story say the people closest to the money don't believe a word of it. A council of former ministers and executives just told companies to take "immediate and decisive action" because the technology has become a "clear and present danger" to public trust. The same week, the White House handed the AI file to a man who already runs the country's intelligence apparatus.
Look at what the survey is really measuring. These executives are not losing sleep over whether the machines are safe. They're losing sleep over whether being caught misusing them will hurt the brand. Those are different problems, and only one of them gets a company to stop.
The reputational incentive is real, and it may even do some good. Shame works on boardrooms in ways regulation sometimes can't. But a system that relies on executives fearing a bad quarter to keep AI from harming people is a system with the safety rail made of PR strategy. We should want better rails than that, and we should want them from a government that isn't treating the whole thing as a side hustle for the intelligence director.
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