Google (GOOG) and Apple (AAPL) share the top spot in a study of the world’s most reputable companies conducted by Reputation Institute. Disney (DIS), BMW (BAMXY.PK), and LEGO round out the top five in the 2011 Global RepTrak™ 100, a consumer study developed by Reputation Institute to assess the reputations of 100 of the world’s most prominent companies. The study provides an assessment of the global reputation landscape—the companies that are most liked, trusted, and respected by over 48,000 consumers across 15 countries. Data collection was powered by Survey Sampling International. Five other companies round out the Top Ten: Sony (SNE), Daimler (DAI.DE), Canon (CAJ), Intel (INTC), and Volkswagen (VLKAY.PK).
A major finding of this study is that most companies have stronger reputations in their home countries than abroad. But even these powerhouse companies are not able to generate respect in all 15 countries. Apple, Google, LEGO, and Sony are the only companies to make the top ten in nine of the 15 countries. Even more telling is the fact that, of the 100 companies, only 12 made the top ten in five or more of the 15 countries.
Reputation Institute examined how these companies were perceived in four regions. Each region had a different winner: Kellogg’s (K) in North America, Google in Latin America, LEGO in Europe, and Disney in Asia Pacific. “To build a strong reputation on a global level requires a broad platform that covers all seven dimensions of reputation, including Products & Services, Innovation, Workplace, Governance, Citizenship, Leadership, and Performance,” says Reputation Institute Executive Partner Nicolas Georges Trad. “Companies need to integrate reputation management into the way they do business.”
A second key finding of the study is that companies generate tangible benefits from building strong emotional bonds with consumers. Across the 15 largest countries in the world, companies with strong reputations receive, on average, three times the support of their less reputable competition. Reputation can be used to drive this support—when a company improves its RepTrak™ Pulse score by five points, public recommendations increase by 7%.
Because support is greater for better-regarded companies, their financial performance is also higher. Among the RepTrak™ 100, better-rated companies enjoy a 9% return on assets, compared to lesser-rated companies who earn a 6% ROA. Despite facing similar risk profiles, investors appear to reward more reputable companies by bidding up their shares. Companies with higher RepTrak™ Pulse scores have both higher price earnings ratios and earnings per share than lesser-regarded companies.
“The results of the Global RepTrak™ 100 Study confirm that, when evaluating companies, consumers and investors are aligned. The greater the reputation of a company, the more support it earns from consumers, the better its operating performance, and the more money investors are willing to pay for its shares. This is a key feature of the emerging Reputation Economy we now live in,” says Reputation Institute Chairman, Dr. Charles Fombrun.
Finally, a third key finding of this study is that the drivers of reputation vary by industry and by region. While the product dimension is the top driver of reputation globally, it has a lower impact in BRIC countries (Brazil, Russia, India, China). Perceptions of a company’s performance and governance account for over 30% of a company’s reputation in BRIC countries, and are key differentiators for companies who want to win business there. As Executive Partner Kasper Ulf Nielsen commented: “Many established brands are finding that merely pumping advertising and products into a market does not yield the return of investment they expect and desire. Having a local presence and communicating about it are key ways to win trust and support from consumers, politicians, and opinion leaders. That means focusing on reputation.”
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