Studies have shown that companies with a well-managed reputation can bring about substantial tangible benefits. An article by Charles J. Fombrun and Christopher B. Foss - "The Reputation Quotient, Part 2: How much is a Corporate Reputation Worth" (The Gauge, Vol. 14, No. 33, May 2001), looked at a study conducted by the University of Texas.
The study looked at 10 groups of companies with an average value of US$3 billion with similar levels risk and returns but different reputation scores. Results of the research showed that a 1-point difference in the reputation score was worth an additional US$53 in market value.
"Return on Reputation", the most recent (2006) Hill & Knowlton Corporate Reputation Watch study conducted by Mori polled 282 experienced analysts in North America, Europe and Asia-Pacific. Of this, over 90% of the analysts agree that a company with poorly-managed reputation will ultimately suffer from financial losses. Analysts also ranked 'quality of management' as the most important criterion which influences their recommendation of a company.
With a reputation managed correctly and presented carefully, even a period of crisis or uncertainty need not have any long-term impact on public opinion, market share, position or share price.
