For businesses, reputation has never been more crucial, new research from the USC Annenberg Center for Public Relations finds. According to its “2023 Global Communications Report,” tangible benefits accrue to companies that build and maintain positive reputations.
Those benefits include improved financial performance; better ability to attract and retain top talent; and the power to drive purchase and investment decisions and sustain what the reports calls “a company’s permission to operate.”
“In an era of activism, politics and polarization, when no one seems to agree about anything, building the reputation of any company is like solving a Rubik’s cube. Every move is connected. Changing the squares on one side of the cube always impacts the squares on another side,” said Fred Cook, director, USC Center for Public Relations, when announcing the report. “This year’s research suggests that solving the cube may be easier if you rely on data instead of stereotypes, and insights instead of instincts.”
But even as reputation becomes more important for organizations, in the social media era, it has also never been more fragile, the report says. “Reputation must be built, maintained and defended in a real-time environment where stakeholders’ values and interests may be aligned or vastly dissimilar,” it says.
Factors that influence corporate reputation are more complex and varied today than even five years ago. Consumer demands for accountability and transparency are rising, while employee voices have gained influence since the pandemic. In recent years, the role of environmental, social and governance (ESG) issues in a company’s reputation has sparked widespread debate. According to the report, investors give more importance to ESG ratings, while PR professionals place ESG at the bottom of their factors that affect reputation.
Communicators and investors agree that customer surveys are an important way to measure corporate reputation, the report finds. PR professionals highly rate social-media listening and media coverage as barometers of reputational health.
According to the study, business performance remains a significant factor in corporate reputation. Consumers, employees and investors strongly agree that healthy business performance is the most important factor in deciding what to buy, where to work or how to invest. For their part, investors ranked social purpose as their second most important factor.
The Global Communication Report is produced annually by the USC Annenberg Center for Public Relations, in conjunction this year with Myriant, Worldcom Public Relations Group, Golin and nearly a dozen international public relations membership organizations, including PRSA.[Image credit: use annenberg center for public relations]