23 June 2014 | door john

Can you put value on a reputation?

Well according to the latest study from Reputation Dividend you can.

Holding a Newspaper

Corporate reputation is delivering more shareholder value to UK companies than at any time since 2007.  Indeed, at the start of this year, the combined value of reputations listed on the London Stock Exchange was £911 billion.

Essentially what this means is the better the company’s reputation the more confidence investors have in the potential for positive economic returns, and the more likely they are to invest in the first place.

Corporate reputations are contributing more to shareholder value than at any time in the last seven years.   All this underlines the importance of strategic and regular communication with stakeholders, whether customers, investors, suppliers, Government or employees.

But it’s not enough to talk a good game. In a year marked by banks and bankers behaving badly and supply chain issues such as the horsemeat scandal and sweatshops in the fashion industry, companies are increasingly being held accountable for their reputations.

Beyond delivering good financial performance, investors and stakeholders need to know that sound management is in place for the long term.

But corporate reputation doesn’t just add value to listed companies, it’s important regardless of an organisation size.

In the words of Warren Buffett: “It takes 20 years to build a reputation and five minutes to ruin it”

Word of mouth, especially over social media, spreads quickly and local companies can easily see their own profits dwindle if they develop a bad reputation.

Employing honest staff with integrity is a good start in building confidence in a company. By administering the IntegriTool online interview, employers can easily assess whether potential members of staff are honest and demonstrate integrity.  If they do, the chances are they are unlikely to bring the company’s reputation into disrepute.

At a time when news relating to companies’ ethical, community and environmental credentials are starting to find traction this can only be a good thing.

For more information about how IntegriTool can help in the recruitment process,  please contact us. We are happy to advise.