Business Execs Now Understand Reputation Value

In recent years, business executives have begun to understand the importance of company reputation and the role that public relations plays in defining and maintaining that reputation.

PRSA research found that 98 percent of business leaders wanted to see reputation management and corporate communication included in MBA curriculum. They see a lack of those skills in young executives. A survey by the Economist Intelligence Unit found that 75 percent of a company’s value is connected to its reputation. If you think that sounds high, ask executives at BP, Toyota, Volkswagen or Chipotle what happened to their reputations in the past few years.

To hedge against financial losses from a damaged reputation, some corporations are purchasing reputation insurance. But that’s like a person buying life insurance or disability insurance. It pays you some money when something really bad happens.

A better approach is to develop a strong communication program; like preventive medicine, it helps decrease your chance of something bad happening. Today, people perceive more value in information, communication and relationships. Communication professionals can help organizations maintain that value.