Close to 26% of the value of the average S&P500 company can be traced back to corporate reputation. So says our Reputation Dividend analysis of more than 440 of America’s largest listed companies going back five years.
Reputation here means as the company is seen by ‘professional observers’ like the investment community and the value it contributes to a company’s market cap. This differs from ‘brand valuation’ which measures the economic impact of brand flowing from customers.
This analysis at last provides senior management with an answer to the question ‘how much is our corporate reputation worth?’ It provides them with an objective tool to track and measure the effectiveness of their reputation building efforts. Most importantly it breaks out the contribution of individual drivers of reputation which in turn enables managers to determine which strategy is likely to deliver the greatest ROI.
It’s not exactly a moon landing but it’s a big step forward for management-kind.