CORPORATE reputation is a phenomenon that forms the basis for the sustainability of any business organisation, whether small or large. A business’ image is critical because it ensures customer loyalty, and attracts professionally sound and honest employees. Through a good reputation, a business becomes a business partner of choice, easily winning community goodwill, and becoming the darling of investors.
Reputation increases a firm’s competitiveness. It impacts the firm’s bottom line, and does affect how both customers and creditors view the company and want to do business with it.
The simple and basic things to do in establishing and maintaining a good company reputation includes always treating customers as “kings and queens”, and giving them a 120 percent service.
It involves reinforcing your reputation by being trustworthy, honest and reliable, and it entails always remembering that building a good business image takes time, hard work, dedication and patience.
Corporate governance processes anchored on an ethical foundation are a tool that companies can use to enhance their reputation.
Good corporate governance and ethical business practices have become the in-thing, and rightly so, investors and creditors now trust doing business with those companies where ethics governance processes are integral to the performance and operations of the business.
This means that a company’s reputation must undoubtedly be anchored on sound governance and ethical business practices.
Incidences like the financial crisis that hit the global economy in recent years has heightened the need for corporate boards to provide well- informed strategic direction that is anchored on sound governance and practicable ethical imperatives.
Company boards therefore have a responsibility to ensure they provide an oversight function that stretches beyond focusing on short- term financial needs to anchor on business sustainability.
Companies must comprehensively address reputational risks in order to increase business opportunities and ensure broader access to markets.
Company leaders should manage governance and ethics risks effectively as part of that endeavour to build a good corporate image.
According to Fombrun (1996), credibility, reliability, responsibility and trustworthiness are the attributes that forms the basis for a sound corporate image. Credibility means being a trusted business partner.
It means company leadership not engaging in scandalous company activities, and making decisions that are anchored on ethical considerations.
Reliability entails company leaders making decisions that are consistent and predictable.
It means leaders coming up with decisions that are inspired by the need to meet the reasonable expectations of the stakeholders.
Responsibility means company leaders being able to fulfil a number of designated roles and informed by the need for accountability, transparency, and disclosure of all material information.
It means company directors attending company meetings and making contributions that have a strong impact in shaping the company direction.
Trustworthiness means forming company decisions whose soundness can be relied upon and depended on by all stakeholders.
A firm needs the trust of its customers and clients to increase its sales. Businesses should establish and adhere to good governance and train staff in business ethics to enhance company reputation.
A few years ago Peter Brabeck-Letmathe, the CEO of Nestle, had this to say about the firm’s reputation: “Nestle has over the years had to deal with a number of highly contested and sometimes acrimonious debates . . . Yet I am stuck by one fact, our corporate reputation has not suffered in spite of decade-long campaigns and public debate.
“I am convinced that two elements played in our favour, Nestle has managed to build that institutional trust in broad segments of the public, through an unquestionable priority given to ethical business practices, the quality and security of its products. We have learnt over time to show a high degree of consistency in handling difficult issues in a transparent and responsive manner. In other words, trust has been nurtured throughout this period,” he said.
Firms should never sacrifice their reputation in order to make short-term financial gains.
Good corporate reputation means good business because it impacts the bottom line.
This article originally appeared on herald