How much is a company’s reputation worth?

1

Wednesday, 15th August 2012 by Karan Chadda

Always a tricky question and one that no one has ever really nailed down. Is it a percentage (or even all) of the intangibles in its stock price? Is it an approximation of the value of sales associated with people who purchase your goods mainly because they perceive you to be good or ethical? Or is it the amount of money a company is willing to forgo for reputational reasons?

If the answer is the latter, then a small number of banks value their reputations in the hundreds of millions of dollars.

The FT reports that a number of banks have ceased offering products that speculate in agricultural markets, citing reputation issues as the reason. With food prices rising in response to this year’s lower yields, many organisations have campaigned against financial speculation in food and other commodity markets. It seems that some banks have listened. This is in spite of the fact that the IMF and other international bodies have concluded that speculation in these markets is not driving up prices.

An executive at one German bank is quoted as saying that they will “be much more sensitive in future about [their] product range.”

Does this signal a shift in attitudes to reputation in the financial services industry? Perhaps. More importantly, it does help demonstrate, although not define, the very real monetary value of reputation.

@kchadda

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One thought on “How much is a company’s reputation worth?

  1. [...] piece was originally posted here on CommsTalk. Share this:TwitterFacebookLinkedInEmailPrintLike this:LikeBe the first to like [...]

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