NEW YORK: A study by Weber Shandwick has identified 23 factors that affect corporate reputation, suggesting that hyper-vigilance is needed to protect brands.
The top three factors for reputation are "quality of products or services," which was rated highly by 63% of respondents, "quality of employees" (63%) and "quality of customer service" (61%).
Other factors include safety of products or services; respect for customer or employee privacy; product or service innovation; industry leadership; financial performance; value for cost or price of products or services; ethics and values; technological advancement; corporate culture; corporate purpose; quality of CEO or chair; training and support for employees; marketing and communications; quality of senior leadership other than CEO or chair; diversity and inclusion of the workplace; community relations; and governance.
At the bottom of the list of reputational drivers are environmental responsibility (51%), global presence (50%) and philanthropy or charity support (48%).
The high number of reputational drivers was "striking" for Leslie Gaines-Ross, chief reputation strategist in-residence at Weber Shandwick.
"When we thought about it, we realized it’s true; everything matters today," she said. "You can’t overlook or neglect any of these factors."
Gaines-Ross predicted that the mental health and wellness of employees will become a key driver of reputation in the future.
Respondents also said on average that 63% of their company’s market value comes from its reputation.
Weber Shandwick zeroed in on companies that realize significantly higher financial returns than average. Executives at these organizations attributed at least 76% of their market value to their company’s reputation.
Elizabeth Rizzo, SVP of reputation research at Weber Shandwick, said she questioned if they were "delusional."
"It turns out they’re not delusional," Rizzo said. "They’re really doing everything right."
Rizzo attributed the high percentage to unique behaviors, noting the importance these organizations place on reputational drivers is "magnified considerably" and saying these so-called "76 percenters" measure reputation and emphasize marketing and comms. They also communicate their reputation to critical stakeholders and make their senior leadership visible.
The percentage of market value attributed to corporate reputation varied by market, with Brazil scoring highest at 76% and Hong Kong and the U.K. at the bottom at 47%.
Corporations realize the importance of their reputation. More than nine in 10 (91%) of respondents said their board of directors thinks reputation is important, and 52% said their boards deem it "very important." Seventy-one percent of executives said their company’s leadership measures and monitors their reputation.
Nearly eight in 10 (79%) said it is important for their CEO to communicate his or her values to bolster their reputation. Almost seven in 10 (69%) of respondents said senior management has mentioned corporate reputation to their workforce in the past year, and 57% of respondents at public companies said reputation has been discussed on earnings calls.
More than three-quarters (76%) of executives whose companies had gone through a crisis in the past two to three years said the crisis was "preventable." Seventy percent of overall respondents said senior management adequately focused on corporate reputation.
Weber Shandwick produced the State of Corporate Reputation in 2020: Everything Matters Now report with help from KRC Research after examining companies in 22 global markets across industries. The 2,227 respondents included mid- to high-level executives at companies with at least $500 million in revenue in developed countries and $250 million in emerging markets.