Reputation Matters

Harris Interactive does an annual poll on corporate reputation. As we have written before, corporate reputation is an intangible asset that directly impacts enterprise value. Harris’s generalizations about their findings bears this out, as respondents tell Harris they are more likely to buy products or services from the top-rated companies, and top-rated companies tend to have less volatile stock prices over the time.  A tag line at Harris Interactive is “your stakeholders’ perception is your corporate reputation.” We think they have that backwards, but why quibble, it's an equation.

Harris polls on social responsibility, emotional appeal, financial performance, products and services, vision and leadership and workplace environment. There are some interesting subplots in this year’s poll.  As before, 30,000 were asked to rank the reputations of what Harris considers the sixty most visible companies. Keep in mind, it is less ordinal position of a company and more direction that is telling.

Corporate America, taken as a whole, is doing a lot better (though still negative) than it has in the past few years.  This is to be expected as we pull ourselves out of a near-depression that many think was caused by corporate wrongdoings. It is also reflected on Wall Street.

AIG still holds fast to last place, though Toyota, with negative headlines and their Chairman testifying before a Congressional hearing on sudden acceleration, has dropped considerably.  Warren Buffet’s handling of what has been labeled “insider trading” by a senior executive, now removed, at Berkshire Hathaway has pushed them from the number one position.

Speaking of reputation, the Reuters photograph published Sunday of SONY executives in a deep bow of apology before a press conference in Tokyo over a hacker’s penetration of their gaming network (PlayStation) might be in the running for business photo of the year.  SONY’s stock had gapped downward twice as the company had to shut down its network, delayed informing customers about the security breach, earlier merely suggested credit card data may have been exposed … all leading up to the apology and the reporting that 10M users were at risk. In a Toyota-esque move, from the when-someone-dies-we’ll-install-the-stoplight department, the company now has created a position of chief information security officer “to oversee the protection of customer data.”