Study values global Reputation Economy at $ 7.07 trillion

A new study has valued global Reputation Economy at $7.07 trillion.

The findings by Burson, a global communications organisation which operates under WPP, has proven that corporate reputation now has measurable financial value, moving it from a soft concept to a hard asset.

Corey duBrowa, Global CEO of Burson said in a statement that “for decades, leaders have known intuitively that reputation matters, but they’ve never been able to quantify it as a financial asset; now, we can” , he said in the document titled “The Global Reputation Economy: A New Asset Class for a New Era”.

“Our research shows that reputation is an interconnected system that, when rigorously managed, can yield billions in measurable returns, build resilience against shocks, and give leaders the confidence to make bold moves. A strong reputation that can deliver financial impact goes well beyond the simple binary of trust.”

He said companies with strong reputations can realize as much as 4.78% in additional unexpected annual shareholder returns.

The analysis, he said found that among the companies studied, the magnitude of this “reputation return” could add anywhere from $2 million to as much as $202 billion in unexpected shareholder returns, above what would be expected strictly from standard financial performance metrics.

According to him, while reputation leaders excel across the board, the research identified the workplace as presenting both a significant opportunity and challenge. Though ranked lowest in terms of perceived importance (11%) among the eight drivers of reputation in the study, it showed a performance gap of 11.8% between the best and worst performing companies in the research.

The study warns this gap may become a crisis for companies that mishandle the integration of artificial intelligence.

“Businesses must go beyond having an ‘AI strategy’ and create an ‘AI people strategy,’ because how they manage this transition will be a powerful statement about how they value their employees,” said Matt Reid, Global Corporate and Public Affairs Lead, Burson, and U.S. CEO, Burson Buchanan.

“Organizations that invest in reskilling their workforce and co-create the future with their people will earn a reputation dividend. Conversely, those that view AI merely as a tool for headcount reduction will pay a reputation tax, with any efficiency gains offset by reputational losses.”

Corey duBrowa also said that the “ research proves that the historical models for studying reputation were at best static and at worst not actionable,”. “Reputation is organic and constantly evolving, so with a clear understanding of which components of reputation are strong or require action, businesses can focus with precision on predicting and influencing the forces that drive perception and fuel financial outcomes.”

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