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COPYRIGHT 2001 Access Intelligence, LLC.
While image may not be everything, a good one does help the stock price and attract employees. How are you cultivating a good corporate reputation to stand out in the crowd?
Corporate reputation--the cumulative perceptions of a company by its key audiences--has traditionally been seen as a "soft" concept: nice to have, but difficult to measure. But in today's interlinked world, corporate reputation is increasingly recognized for its bottom-line impact.
In fact, a large body of research shows that corporations with good reputations achieve higher-than-average profitability compared with their peer groups. Good reputations earn firms stock-market premiums and provide an edge in recruiting and retaining the best employees. Strong corporate brands also win customers and encourage the development of business partnerships.
A recent survey shows that U.S. company senior executives understand the importance of corporate reputation: 95% of the energy CEOs surveyed ranked it as "very important" in achieving their strategic business objectives. This number tracks with results during the last three years of the Corporate Reputation Watch survey, conducted among 600 executives by Yankelovich Partners on behalf of Hill and Knowlton Inc. and Chief Executive magazine.
The survey also found that 77% of CEOs believe good reputation helps sell products and services, 61% believe it helps attract employees and 53% believe a good name increases credibility in times of crisis. The leadership group also credits customers, employees and a CEO's own reputation as the key drivers of corporate reputation, ranking other influencers, including industry and financial analysts, media and shareholders further down the list.
The value of differentiation among corporate reputations in the energy industry was underscored early this year by Marathon Oil president Clarence Cazalot in an address at a petroleum industry luncheon in Houston. Cazalot observed that valuations of publicly traded oil and gas companies had increased most during the past decade among the newly emerged class of integrated megamajor companies--Exxon Mobil,...
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