Reputation and stock market following the nuclear crisis

Quantifying the financial value of intangible assets, such as reputation, has always been a very challenging process, which has attracted numerous academics and analysts.

While it may not be currently feasible to put a dollar figure on the value of a company’s reputation, it is certainly possible to identify correlations between changes in corporate reputation and financial performance.

This is because a company’s reputation is defined as the perception of its behaviour or actions by its different stakeholder groups over time.

A decrease in corporate reputation reflects dissatisfaction among one or more stakeholder groups, which may lead them to alter their relationship with the company, with shareholders potentially disinvesting or customers considering switching providers.

Ultimately this has a direct impact upon the company’s bottom line, hence the correlation between reputation and financial performance.

This article was written by Nicholas Chrysanthou, energy consultant analyst at Alva and released in full on Energy Business Review.