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Why Your Corporate Reputation Matters Most

Why Your Corporate Reputation Matters Most

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A recent study completed by Cyber-Security found that the single most important asset in a company that needed to be protected was a corporation’s reputation.

Your reputation is everything. Point blank. A positive one can bring your company numerous benefits and a negative one can absolutely drive it into an early grave.

But how does one effectively manage their corporate reputation? By following a proven methodology and doing their due diligence proactively.

The purpose of this article is to understand how organizations strategically craft, develop and manage their reputational status as well as note the key elements and methodologies which contribute to an organization’s identity.  

Most and least important corporation reputation drivers - March 2017


Defining Corporate Reputation

Corporate reputation is defined as the overall quality or character that is believed to be assessed of your corporation by the general public.

More specifically, as defined by Olivier Serrat of Asian Development Bank, it’s the “aggregate estimation in which a person or entity is held by individuals and the public against a criterion, based on past actions and perceptual representation of future prospects, when compared to other persons or entities”.

There are several factors that influence corporate reputation – some qualitative, others quantitative – and the degree of importance attributed to these factors is largely subjective pending context.

For example, evaluation and/or management of a legal entity’s corporate reputation is going to differ significantly from that of a not-for-profit organization’s reputation. We will discuss various factors and evaluation methodologies for said factors in the following section.

Definition of Corporate Reputation


What Affects Corporate Reputation

When it comes to criteria affecting corporate reputation, perhaps one of the most important is consistency.

Regardless of the levels of achievement or how well a company outperforms it's competitors, it means nothing if said organization is unable to hold up such performance over time.

Consistency over time – consistent growth over time – is key.

Evaluating brand/identity

A company’s brand or identity is the public perception that is strategically crafted by management. It is  the way in which an organization wishes to be seen — the “embodiment of the desired positioning”.

Questions to ask when it comes to evaluating a brand or identity is whether or not it’s cohesive.

Does the website reflect the nature of the organization and their espoused values/beliefs?

Does the corporate work environment also reflect these?

These are some questions to ask yourself which can help give greater insight into the underlying structures of the business.

Corporate communication

The communications strategy of a company also greatly impacts their reputation. Is there a certain degree of openness? How transparent is the communications? Is the frequency of communications structured, regimented and timely or disorganized and delayed?

When considering factors such as corporate communications, it's important to also consider the internal environment.

For example, identifying how management interacts  with employees and what sort of work environment is fostered is equally as important. Does their internal communications structure represent a closed, wary environment or an open and transparent one?


Governance is another important criterion for evaluating corporate reputation.

Have there been management issues?

What is the organizational structure like?

Identifying the reputation of the key chairmen, executive and internal/external stakeholders is important because it gives you valuable insight into the organization itself.

For example, if a high-profile investor is on board, that carries weight that shouldn’t go unnoticed just as does an executive team with a strong track record of success.

A CEO on the cover of Times magazine or who consistently makes the top lists of annual evaluations by industry media outlets is going to greatly impact a corporation’s reputation.

Financial performance/management

Financial performance is a clear factor that impacts corporate reputation. Assessing a company’s profitability, including their sales revenue, sales volume, dividends paid to shareholders, market price per share and the stability of such dividends is key.

Furthermore,  taking into consideration a company’s bond rating is also a good criterion for evaluation. For example, an Aaa or AAA rating from Moody’s or S&P is going to reflect quite favorably on a business’ reputation, whereas a Bbb or BBB would not.


Assessing the public persona is another factor which can help piece together the puzzle of evaluating a corporation’s reputation.

What is their public persona like?

What do the customers say?

Are they happy? The employees?

How is their public relations or digital communications strategy? Are they effective?

Is the company doing a good job at staying proactive and strategically managing how they are perceived?

Products and Services

Evaluating company’s products and services is also an important factor in determining corporate reputation. After all, an organization can be on the up and up on absolutely every aspect of their reputation, but if their product/ services suck – does it really matter?

If they’re not reliable, it means nothing.

Workplace Environment

The internal environment plays a big role in evaluating a corporation’s reputation.

What are employee perceptions of the company?

After all, they are the ones who know it the most intimately.

Do they tend to recruit solid employees or invest heavily in employee development? How do they treat their employees?

A company that has a killer product, customer service, great financials and all that jazz can’t sustain itself if employee satisfaction is in the dumps and turnover is high.

Corporate Social Responsibility

In today’s day and age consumers and investors alike want to do business with socially conscious organizations.

Corporate transparency is key and how a company interacts with the communities surrounding it and the environment are of paramount importance.

For example, all one needs to do is take a look back at the BP oil spill to see how important social responsibility is for a business. The Deepwater Horizon oil spill caused the company to lose a whopping 55% of it's shareholders.

‍How to Measure Corporate Reputation


How to Measure Corporate Reputation

There are countless companies and groups both domestically and internationally who have put in place objective measurement systems based on hard data and analytics surrounding a corporation’s performance.

These companies come up with what is often termed as a corporate reputation index.  

The Brand Asset Valuator (BAV), originally developed by Young and Rubicam is just one metric that has seen widespread application.  

Measurement of a brand is done under two main heads which are:

  1. Brand vitality
  2. Brand stature

Brand vitality refers to the current and prospective growth that a brand holds, whereas brand stature refers to the power of the brand.

These two sections are further divided down into four parameters:

  • Differentiation
  • Relevance
  • Estee
  • Knowledge

Differentiation refers to a brand’s ability to stand out in the crowd.

Is it unique? Is it distinctive?

Relevance refers to how closely consumers are able to relate with a company.

Esteem refers to the public perception of the company and Knowledge refers to the level of awareness that the general public has about a company.

Other metrics such as the Harris Poll’s Reputation Quotient are well-known in the industry, as is the Reputation Institute’s RepTrak — widely considered a gold standard when it comes to finding reliable indexes with which to evaluate a company’s corporate reputation.

The Reputation Institute comes up with detailed reputation data by “tracking and analyzing stakeholder perceptions” for more than 7,000 companies in 250 companies.

Other companies such as Insightrix are one of many which prove to be extremely valuable in helping to evaluate an organization’s reputation.

They have a wide range of services which can help provide solutions to a variety of business needs regarding reputation research and/or management.

Developing good practice in ‍Corporate Reputation Management

Corporate Reputation Management

Reputation management is defined as the process of “tracking an entity’s actions and other entities’ opinions about these, reporting on those actions and opinions, and reacting to reports through feedback channels to build, maintain, or recover reputation”.

There are two main approaches to reputation management:

  1. Static
  2. Reactive

Static refers to a more asset-focused approach whereas reactive involves exactly what it’s name entails. When a company takes both approaches into consideration, is when it gets ahead of the game.

In his paper “Managing Corporate Reputation” for Cornell University’s ILR School, Olivier Serrat of Asian Development Bank recommends that organizations take three steps when it comes to corporate reputation management:

  1. Re-conceptualize reputation as a strategic boundary object as this offers a “lens through which to analyze tensions between local values, reputation, and the inputs and outputs needed to uphold coherence across intersecting communities”.
  2. Clarify expectations and continually conduct reflective assessments.
  3. Define stakes—by  shifting away from fixed notions of stakeholders so as to be able to more readily adopt a “social constructivist” perspective.  

The Reputation Institute on the other hand suggests seven steps to reputation management which are as follows:

  1. Adopt a model for management across all organizational functions.
  2. Understand what their seven reputation dimensions and attributes mean to different stakeholders.
  3. Align corporate messaging and activities with key drivers for stakeholders.
  4. Create employee alignment with the reputation platform that is chosen.
  5. Create a cross-functional reputation committee for oversight to ensure coherency.
  6. Consistently monitor reputation with stakeholders against competitors
  7. Integrate reputation management into all business processes

Regardless of which management tactics you choose, whether you decide to move forward with one or another, or integrate various concepts of each listed to create a management strategy that is unique to your particular company — remaining consistent and proactive is key.

50% of candidates would not take a job from a company with bad reputation even for a pay increasee



The single most important takeaway in this article is that you must view your corporate reputation as an asset.

A corporation’s reputation affects everything from financial performance, to competitiveness and shareholder value. Whether we like it or not, public perception plays a vital role in the success of business endeavors.

To some, it may not necessarily seem fair – especially those who’ve had to  fight through slews of bad publicity.

However, there’s an upside to every situation, and in this case, taking the time and effort to strategically craft a positive image  with a solid reputation management strategy is key — whether you’re a budding startup or a business veteran.

So do some brainstorming and take steps today to help further manage and boost your corporate reputation. The hard work will be more than rewarding in the end.

We're experts in building and maintaining brand reputation; contact us today for insights in your brand!


Why Your Corporate Reputation Matters Most
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