A company's reputation determines 63 percent of its market value

State of Corporate Reputation 2020: Together with KRC Research, global communications and marketing agency Weber Shandwick conducted the online survey Everything Matters Now among 2,227 executives of high-performing companies in 22 markets worldwide. In addition to reputation, the survey also looked at culture, CEO activism, employee activism, crises and risks.

Reputation is subject to multiple drivers 

A company's reputation is influenced equally by a variety of factors, with no one driver having a greater impact than the others. When asked to rate nearly two dozen different factors influencing corporate reputation in terms of how much each contributes to their own company's reputation, global executives each assign similar scores. All 23 factors are ranked highly by nearly half of global executives. Everything from people and product quality to financial performance and corporate culture is relevant in guiding corporate reputation today.

Similarly, the report found that most reputational damage is self-inflicted. Among global executives who report that their companies have experienced a crisis that affected their reputation in the last two to three years, an astonishing 76 percent say the crisis could have been avoided.

Reputation is on the agenda of the Board of Management

Corporate reputation is on the radar of management. According to nine out of 10 executives (91 percent), corporate reputation is important to the board, and about half (52 percent) even say it is very important to the board.

Reputation is measured and communicated 

The majority of global executives (71 percent) report that their management measures or monitors their organization's reputation. When asked how reputation is measured, executives frequently cite factors such as employee satisfaction or engagement, revenue and financial performance, and surveys of various stakeholders.

In addition, reputation is a notable key point of communication from management. About seven in 10 (69 percent) say management has mentioned the company's reputation to the workforce in the past 12 months, and more than half of public companies (57 percent) report that corporate reputation has been the subject of sales discussions.

Value communication is the key

Communicating corporate values is critical today. Eight in 10 global leaders (79 percent) say it is important for the CEO(s) to communicate the organization's values in order to be highly regarded. In addition, a company's ability to communicate and convey its mission, vision and values is closely linked to how a company survives a crisis, as it is the strongest marketing and communications-related factor in terms of reputation.

Insights on building reputation for higher market value

State of Corporate Reputation 2020: Everything Matters Now provides guidelines for strengthening a company's reputation to maximize its impact on market value. To do this, we surveyed a segment of global executives who achieve exceptionally positive financial results because of a strong reputation, with a statement that at least 76 percent of their market value is attributable to their company's reputation. The "76-percenters" are companies that work on their reputation for the highest returns and differ significantly from average executives in their behavior. The following insights are based on the key differences and form the basis for best practices to turn reputation into market value.

1. Recognize their importance
2. Monitor and measure them
3. Be an internal advocate
4. The management is very visible