Concluding Remarks: The Vulnerability of Corporate Reputation

Abstract

Reputation is one of the most undervalued but nonetheless crucial organizational assets. A good corporate reputation can lead to numerous benefits such as lower costs, competitive barriers that enable firms to charge a premium price, to obtain improved credit rating, to attract better employees and to retain more loyal customers, all translating into improved performance and increased profitability. Reputation also provides clear signals to others about intentions or activities. The notion of reputation can be a touchstone that enables leadership to change strategic direction according to sound norms and structures of governance.

Four generic recommendations aim to create, enhance or preserve corporate reputation: (1) communicating a corporate narrative based on a meaningful purpose versus short-termism; (2) collaborative innovation versus self-focused competitive advantage at all costs; (3) caring for “people, planet and proft” versus shareholder value maximization; and (4) governing responsibly beyond compliance versus minimally interpreted fiduciary accountability.

Wise and resilient leadership built on appropriate foundations of good corporate governance usually performs better over a longer period. Despite the importance of corporate reputation, it remains vulnerable and dependent on outside perspectives.