Visibly Poor Performance

Harrisineractive has just published it’s 2005 Survey of the “Reputation Quotient” for the sixty most visible companies in America. The top company, Johnson&Johnson, received a “B” grade (albeit just barely: J&J got a numerical score of 80%).

Of the rest of the top 60:

27 got a “C”
24 got a “D”
8 got an “F”

Overall, not much movement when compared with the 2004 results

A Zero
B Zero
C 31
D 19
F 10

In today’s irrational financial markets, ‘intangible assets’ such as brand often account for significant parts of a company’s overall market value. The vast majority of these ‘most visible 60’ have large market capitalizations. Leaving us to ask, “Does reputation have anything — anything — to do with brand?”

We know that extreme reputational damage — Enron — can link to brand and market capitalization. But, it must really be only at the extremes. Because when not a single one of the most visible companies merits an “A” grade and, in fact, nearly all get “C’s” and “D’s”, what Harrisinteractive is measuring must not have much to do with how folks pick and choose stocks.

Put differently, folks out there are deeply worried about the mediocre to lousy reputations of these visible companies. But, when it comes to their IRAs or other stock holdings, they must just be ‘holding their noses”.

Suggestion: next time your at the dinner table with your kids, explain this to them (and to yourselves).

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