Reputation Management

Reputation Indices

What companies have the “best” reputations? Not only is there never full consensus on an answer to this question among the many reputation indices that have been released by the media and other parties, but also, there is no full congruence on what it means to measure reputation. However, there are generally some companies, brands, and individuals that tend to perform well (or poorly) across indices, whether they purport to measure reputation, respect, admiration, brand, or some other variation on a theme. So while reputation indices differ substantially in approach and outcomes, they share the goal of measuring stakeholders' perceptions of business entities.

Most business reputation indices focus on company reputations, although clearly brand reputation influences company reputation and vice versa, while the reputations of individual executives can reflect or less often clash with the reputation of the enterprise. One aspect of reputation measurement methodologies that leads to important differences in results concerns the survey population. Perceptions of the general public tend to differ from perceptions of, for example, chief executives, stock analysts, the business media, or other specific expert populations, while perceptions also vary as a result of other factors, including respondent nationality, economic class, and other demographic indicators. These indices do not always measure a company's internal reputation (among its employees), which may be as important as its external reputation but may be the result of significantly different factors.

These differences among survey populations and methodologies lead to different attitudes about what matters to corporate reputation. Reputation generally is sometimes mistakenly equated with a reputation specifically for corporate responsibility, which in some studies is merely one factor among many that constitutes overall reputation. While the rise of socially responsible investing has increased the potential impact [Page 1821]of corporate social performance on corporate financial performance, not all investors (or reputation indices) place equal weight on the importance of social responsibility to corporate reputation. In general, the factors that constitute various reputation indices vary significantly enough from study to study and there is no general agreement even on a typology of factors. Certain factors focus primarily on financial success and efficiency, others on strategy and governance, corporate social responsibility and trustworthiness, product innovation and quality, brand and name recognition, and even on how well the company does with regard to managing its reputation (e.g., through communications and public relations, marketing, or political maneuvering). While a good reputation may be seen as inherently valuable, often these studies seek to make a descriptive connection between a good reputation (however defined) and good financial performance.

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