Commentary
Corporate Reputations Take A Beating This Year
- by Richard Whitman , Columnist, May 23, 2024
Stumbling over issues like inflation and culture wars are damaging a majority of the corporate reputations measured by latest edition of the annual Axios-Harris Poll 100.
The poll concluded that the public has raised the bar for corporate excellence this year.
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Nvidia, 3M, Fidelity, Sony and Adidas have the top-five best reputations, respectively, in America, according to the poll. The fact that Nvidia is number one says a lot about how much thought Americans are giving to artificial intelligence currently.
Social media platforms and companies viewed as politically polarizing took the biggest reputational hits this year. The Trump Organization, X (formerly Twitter), Spirit Airlines, Meta/Facebook and Fox Corporation are at the bottom of the 26th annual list, with the poorest reputations.
"This year's Axios-Harris Poll 100 finds a systemic loss in corporate reputation, as public backlash to the handling of inflation has created higher prices and poorer value for the stretched American consumer," said John Gerzema, CEO of The Harris Poll. "72% believe companies are taking advantage of inflation to increase their profit margins rather than being fair and transparent with the prices they charge."
Stagwell's Harris Poll has ranked reputation since 1999. The survey's Reputation Quotient (RQ) ranking is based on companies that are most visible to the general population and on their performance in seven key areas:
Trust – "Is this a company I trust?"
Vision – "Does this company have a clear vision for the future?"
Growth – "Is this a growing company?"
Products and Services – "Does this company develop innovative products and services that I want and value?"
Culture – "Is this a good company to work for?"
Ethics – "Does this company maintain high ethical standards?"
Citizenship – "Does this company share my values/support good causes?"
This year, only one industry – pharmaceuticals – improved. Biggest individual company gainers: BP, Hobby Lobby, Fidelity, Subway and eBay. BP? As in British Petroleum? That’s a bit of a shocker, but kudos to their reputational management team (I guess).
Biggest decliners: Boeing, Shein, Reddit, Starbucks and Anheuser-Busch. New to the list: AI developer Nvidia, Mattel, Novo Nordisk, Bayer and Alaska Airlines.
"To excel at reputation, companies must deliver on strong business performance, corporate character and trust," said Ray Day, vice chair of Stagwell. "While you can build a brand, you earn a reputation. This year's results underscore more than ever that reputation needs to be a priority from the board room to the C-suite – as companies with the strongest reputations also are the ones winning in the marketplace."
Among the insights from this year's study:
63 of the 89 companies (or 71%) see a decline of half a point or more. Only 15 companies (17%) see an improvement of half a point or more. 2024 is the lowest number of companies with an "excellent" score in a decade.
Reputation scores are at the lowest levels since pre-COVID. The average score of the 100 companies this year is 72.8, down from 74.1 last year and 74.2 in 2022.
Top reasons for declining reputations include: companies not doing enough to keep prices fair from inflation (26%); poor ethical behavior related to unfair pricing and passing along costs or suppressing wages/lack of hiring despite profit-making (20%); and too much focus on cultural issues not important to consumers (18%).
66% of Americans recently have stopped doing business with a company because of unreasonably high prices, and 59% have gone elsewhere due to falling quality.
To improve reputation, Americans believe companies should: be more focused on keeping prices fair during inflation (53%); improve product quality, safety and consumer satisfaction (48%); and pay good wages while promoting economic growth through job creation (48%) – rather than ESG (23%), AI (13%) or taking proactive stances on societal or culture issues.
The Axios Harris Poll 100 is based on a survey of nearly 25,000 Americans in a nationally representative sample conducted January through March. The two-step process starts by surveying the public's top-of-mind awareness of companies that either excel or falter. These 100 "most visible companies" are then ranked by a second group of Americans across the seven key dimensions of reputation to arrive at the ranking. If a company is not on the list, it did not reach a critical level of visibility to be measured.
