Major global brands have more work to close the gap between their performance in the marketplace and their citizenship, according to the inaugural Global Corporate Reputation Index, released by Burson-Marsteller, Landor Associates, Penn Schoen Berland, and BrandAsset Consulting.
Using a proprietary model, the Global Corporate Reputation Index identifies 25 consumer companies with the best reputations, based on 40 000 consumer interviews regarding the qualities they associate with nearly 6 000 companies in six countries.
The Global Corporate Reputation Index focuses on two sets of attributes that drive corporate reputation: performance and citizenship. Performance measures the perceived success of a company’s products and services. Citizenship is a measure of the less tangible aspects of a company’s reputation. The strongest companies typically rank nearly 30% above their industry averages on citizenship, while outperforming their industries on performance by an average of 20%.
Nevertheless, for most companies, citizenship continues to significantly lag performance, indicating many are still paying inadequate attention to this category, despite the increasing role it plays in today’s marketplace.
“This Index shows that companies have an opportunity to strengthen their reputation by demonstrating and communicating more actively their commitment to good corporate citizenship,” said Mark Penn, CEO of Burson-Marsteller and CEO of Penn Schoen Berland. “By sector, banks and oil companies have the most work to do while tech companies are still enjoying the glow from their innovation and vision.
“The results of this study bear out what we’ve known for some time,” said Craig Branigan, chairman of Landor Associates. “In an increasingly transparent world, isolated programmes and insufficient or insincere commitments will undermine corporate reputations. On the other hand, visible, authentic, and consistently delivered citizenship programs build successful corporate reputations and brands that stand the test of time. Good corporate citizenship really is good business.”
Other key findings include:
- Time Helps Build a Strong Reputation: Great reputations are built over time, as many of the companies with the strongest reputations are also those that have the longest histories. In fact, 20 of the top 25 companies were founded before 1950, with the oldest tracing its roots all the way back to 1865. The top companies have an average age of 87 years, suggesting that the ability to withstand the test of time translates well into overall reputation.
- Being Big Helps: The largest companies have the strongest reputations and do especially well on citizenship in particular, suggesting a possible model for other companies to follow.
- Reputations Can Vary Across Countries: China awards the highest reputations of all the markets in the study, while Japan and Brazil are the most critical of companies.
- Banking Industry Is Challenged Following Crisis: With the negative headlines of recent years surrounding the perceived role of the banking industry in the global financial crisis, it is not surprising that this industry scores lower than nearly all other industries on overall reputation. However, there are notable regional differences, with banks suffering the most on both performance and citizenship in the US and Russia, while scoring comparatively strongly in China and Brazil.