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Corporate image, Performance monitoring
Despite the increased focus on the importance of corporate reputation following the nosedive of previously well-respected companies, most executive managers still fail to take the necessary steps to protect their company from unexpected reputational demise. Until executives actively manage the perceptions of their company with as much rigor as they apply to managing financial, operational or technology risk, a company's most important intangible asset - its reputation - will be at risk. Those enlightened management teams who understand this dynamic will be among the leaders who break new ground in the ongoing effort to rebuild sustainable investor confidence.
There is an increased recognition of the importance of corporate reputation to a company's ability to thrive. According to research conducted by Opinion Research Corporation on behalf of Hill & Knowlton and Korn Ferry International (originally published in the December 2003 issue of Hill & Knowlton's All Things Corporate[1]) (see Figure 1).
Corporate reputation is experiencing a renewed focus as a discipline, as the many books and articles emerging on the topic confirm. A simple Google search on the term "corporate reputation" returns over 40,000 listings. That's a good start, but it falls short of where executive management needs to be in treating corporate reputation as the significant business risk it is and not just as a public relations campaign that is activated during times of crisis.
Why is this important? It is clear that public missteps resulting in the loss of confidence and trust among investors, analysts, customers or other stakeholders are understood to be potentially devastating to the long-term survival of a business. Even modicum suggestions of "cracks in the armor" on key intangible characteristics such as ethics, management talent, perceptions of prowess in research and development, and treatment of employees can result in undercurrents of questions that will distract an executive team from the core mission of building its business and providing its shareholders with an attractive ROI. A case in point is Wal-Mart. In May 2002, Rating Research LLC (RRC), a reputation rating agency (www.ratingresearch.com), issued a report, perhaps a premonition of future issues, indicating that the "one anomaly in Wal-Mart's otherwise stellar reputational performance is its ninth place (out of 13 ranked department stores and discount...