Corporate reputation can carry energy companies through crises, report says

Sept. 12, 2002 — To combat the various causes of corporate anguish — an uncertain economy, the rash of Enron-like, or disappointing earnings — many experts are advising companies to focus on their hard-earned and longstanding corporate reputations, a report said.

Reputable companies gain financially, shows a Penn State study cited in an Energy Competition Strategy Report cover story by Cutting Edge Information, a Durham, NC-based consulting firm.

Between 1983 and 1997, Fortune’s most-admired companies increased annual returns on average by 22%, while, by comparison, the Standard & Poor’s 500 posted 16% returns. On the lower rungs of the ladder, companies whose reputations had soured posted negative returns of 1.7%.

“Business faces a very real crisis,” Cutting Edge CEO Jason Richardson tells ECSR. “Companies that focus on their reputations will weather this storm and see tremendous long-term benefits to market share, investor support, and employee morale.”

In anxious times, the value of a corporate reputation is tremendous, notes Jeff Resnick, principal and chief research officer for Rating Research LLC (RRC), a Bedminster, NJ, firm specializing in the assessment of corporate reputations. “Companies that have adopted the practice of creating a strong corporate reputation tend to be in a stronger position to acquire the best companies, form strategic alliances with a preferred provider, or expand a particular business line,” Resnick tells ECSR. “A strong reputation helps those companies weather criticism more effectively.”

Other articles in September’s Energy Competition Strategy Report include:

* Learning the language of trust. Experts reveal the communication techniques and skills that enhance credibility and trust with internal and external audiences, along with the mistakes that can destroy it.

* Disclosing financials fast and accurately. With the SEC’s proposed new disclosure and reporting rules, chief information officers can help their CEOs by providing the right technology that intelligently captures and analyzes financial data throughout the company. ECSR also looks into what one Texas organization is doing to make its disclosures more accurate.

* FERC’s overhaul of affiliate rules. In late June, a group of energy experts discussed FERC’s proposed changes to affiliate rules as they apply to the natural gas industry. ECSR talks to five industry experts to find out, bottom line, will the proposals push forward and how will they affect competitive markets?

The Energy Competition Strategy Report, a subscription-based news service, is written by NHI Publications. For more information, visit

Source: NHI Publications

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