Our research in 2015 showed that FTSE 350 companies estimate that up to 41% of their valuation is influenced by reputation, yet only 16% of these companies have a mechanism to understand and measure their reputation in relation to business outcomes.
At the same time reputation is often seen as an element of risk management rather than asset enhancement. As a result most companies only actively consider their reputation after a significant issue or crisis event.
We have long advised that reputation needs to move onto the Board agenda with the responsibility managed through a designated executive or non-executive director.The challenge has been the lack of data to enable senior management and the Board to make valid decisions that can impact commercial and equity value.
This data is now available. By blending multi-stakeholder research with powerful data analytics, organisations have the ability to actively manage this key asset and also use the data to prepare for potential reputation issues.
The link to the document below shows an example of the correlation of three years of stakeholder research and public data analytics, in this case released with the kind permission of Carlsberg Group.The results show that based on in-depth stakeholder research, advanced public data analytics can be statistically relied upon to continually monitor the changes in reputation and also to act as an early indicator for potential reputation issues in the period between the next in-depth research.
Analysis from Harvard has proven that “stakeholder-balanced” companies show significantly higher sales growth against those that focus purely on shareholders.This new multi-stakeholder data set enables the active management of reputation as a valuable asset.