Shell Leads the Reputation League Table

by Phil Shirley on 13-01-2012

Having worked with oil and gas industry clients for many years, it should be more surprising to see an oil company at the top of the Reputation Contributions league table (http://www.bestrabrand.com/reports/Bestra_Reputation_Dividend_letter.pdf) than the actual league table itself, but

a) Shell are very good at getting their reputation value drivers right and;

b) even though we know that corporate reputations contribute to shareholder value, the causal link between greater profitability and a better reputation is still hazy.

According to Bestra the ten most valuable corporate reputations are contributing an average 48% to shareholder value (as measured by market cap). i.e. shares issued x share price. By contrast, the ten least effective reputations are eroding value: on average 10.7% of market cap.

In terms of reputation value drivers, at the height of the recession, the most potent elements of reputation were ‘value as a long term investment’, ‘financial soundness’ and ‘quality of management’.

The importance of ‘community and environmental responsibility’ are high on the list again.  Significantly quality of marketing – or the ability to communicate consistently to stakeholders – is recognized as a key value driver and included in the scoring criteria for reputation contributions, but it is nowhere near as prominent as other value drivers. Reputation Contributions also vary considerably by business sector. Oil & Gas heads the list.

What do you consider value drivers for your business?