The Price Tag of Reputational Harm
What is the cost of reputational harm? The New York Times has a back of the envelope calculation from recent crises making the news. Here is what they say?
“It would be too crude to conclude from this analysis that reputation is worth 11 to 14 percent of market capitalization…” and concludes the following: “What is clear, though, is that reputation has huge value. Companies need to guard theirs vigilantly.”
Somewhere in my many investigations on reputation, I have seen a similar calculation that reputation (not reputational harm) places a 10 to 14% premium on a company’s market value. So the Times might just be right.
[By the way, back from vacation. Back to work.]