Corporate Reputation Management by Richard Vanderhurst

Due to latest company events, many of the top firms saw major shifts in their corporate reputation ratings, says new results from an annual study conducted. The study reveals sharp declines in corporate reps of previous leaders of the index, while reputations for previous laggards rose seriously. The rise and fall of corporate reputation ratings affects the ability of a company to achieve its goals and to control threats to its best asset--its price in the market.

According to the most recent Reputation Index Survey, the overall reputation index for the set of 30 corporations has stayed at a doggedly high level for the previous three years. 4 companies that formerly had very powerful reps experienced heavy declines. Top companies lost 20 points. The majority of these drops are associated with company-specific developments, including senior executive performance, market changes and being dropped, and the recall of preferred arthritis drug while other large firms were influenced by sector issues.
against this, some companies with weaker reputations made major strides in improving their reputation. Leading in positive change in their reputations were Altria, SBC and JP. Altria's improvement can be accredited to the current reduction in public criticism of tobacco-related firms, while both SBC and JP profited from increased advertising activities and media coverage surrounding their own amalgamations. Overall, the companies that saw the most important swings in company reputation are from a diverse range of industries, suggesting that individual company management has command over how their companies are perceived by investors.

'Reputation matters. Those firms affected by bad news related to products, executive behavior, or sector issues, lost reputational equity despite their blue chip status,' says a general chief of a gigantic Management Center in the US. 'Good corporate reputation acts as a buffer, shielding a company in the middle of unfavourable reports or negative industry developments. People tend to give the benefit of the doubt to a well-perceived company that has built up reputational equity over the years.'

The impact of corporate reputation on share price is mixed.

Generally, the decline in company reputation has a much less obvious impact on stock price in a stable or rising market, as it is allowed for in a company's value. Decreasing the risk of negative impact on stock prices in weak markets and on negative stories is the rationale managers consider reputation management to be so crucial.

The key factors when individual financiers assess corporate reputation are :
--Fair and ethical business practices
--Trustworthiness
--Quality goods and services
'In today's business climate, corporations never know when regime officers or other stakeholders will accuse the company of improper or illegal activity,' says TNS senior VP. 'With directors held increasingly accountable for both company performance and behaviour, managers will have to focus on reputation management with the same discipline they manage other sides of their business.'
About the TNS Overall corporate Reputation Index Survey
The TNS survey measured changes in company reputation of the DJX thirty corporations with individual stockholders yearly between 2003 and 2004. The releasing of this information was timed to make it historical in nature, not always reflecting the position of the corporations today. The TNS company Reputation Indices reported here are based mostly on thousands of individual backers who rated the firms constituting the DJIA index on factors that make a contribution to corporate opinion, reputation, and equity. The ratings were picked up in the last months of 2003 and ber 2004 [**].

About the TNS Overall company Reputation Index Survey
The TNS survey measured changes in company reputation of the Dow 30 corporations with individual speculators annually between 2003 and 2004. The release of this information was timed to make it historic in nature, not necessarily reflecting the position of the corporations today. The TNS company Reputation Indices reported here are based mostly on thousands of individual backers who rated the companies constituting the DJIA index on factors that make a contribution to corporate opinion, reputation, and equity. The ratings were collected in the last months of 2003 and ber 2004 [*COMMA] respectively [*T].

Richard Vanderhurst

Richard Vanderhurst teaches SEO engineers the best practices in Corporation Reputation Management.


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