Covid-19, global trade fears and corporate reputation

Covid-19 and global trade fears challenge UK corporate reputations, valued at more than £900 billion

Shell, BP, Unilever and Diageo post strongest reputation contributions

The gross value of reputation in FTSE350 companies at the start of 2020 reached £941 billion, supporting 35% of the total market capitalisation, according to Reputation Dividend’s UK 2020 Report, launched end of February.

This is down from previous years, impacted by the emergence of Covid-19 and world trade uncertainty during the Brexit transition and a rancorous US election.

According to Reputation Dividend Founder Simon Cole, “while these are big numbers, the impact of the confidence inspired by reputation has declined. Analysis shows that investors are looking for harder evidence of how companies will succeed in the months and years to come.  As an asset, reputation is in the eye of the beholder, and it may well be in the eye of the storm currently as investors seek shelter in a nervous market.”

Reputation Dividend Director Sandra Macleod added: “the key drivers of reputation value are clearly the ‘table stakes’ of financial soundness, quality of management and quality of goods and services.  Beyond that, while it differs across sectors and individual companies, drivers of incremental value are focusing now on innovation and global competitiveness.”

The UK 2020 Report quantifies the contribution of corporate reputation to the UK’s largest listed companies expressed as the Reputation Contribution or proportion of a company’s market cap attributable to the confidence inspired by its reputation and lists the companies with the 10 most economically influential reputation assets. This is 12th year since tracking began and has been used by boardrooms of leading organisations to benchmark and support prioritisation of operational and narrative messages to protect and grow the value of the intangible asset that is reputation. Reputation Dividend is the only recognised index of the financial value of corporate reputation as measured as a percentage of market capitalisation.

The full study is available here.

Sandra Macleod will take part in a special session at the Global Communication Summit 2020 on Reputation, Behaviour and Crisis with Carlo Parrado Curros, Global Head of Crisis Management at Shell: see the programme for more details.