In the digital age, news and information permeates every aspect of our personal media and for better or for worse, this is inescapable. The digital revolution has ensured that news media is omni-present, all inclusive and enduring. For the communications industry, the constant barrage of news presents both a threat and an opportunity. On the one hand, information is readily available and easily accessible, providing us with the opportunity to monitor and react to current events, elevating brands and spokespeople in real-time. However, should an organisation or individual stumble, there’s a risk that wrong-doings will be broadcast in technicolour for the whole world to scrutinise.

Reputation is one of the founding cornerstones that the public relations industry seeks to cultivate and manage. Companies that work alongside public relations firms rely on them to craft and broadcast their message to the media in a way that is unique and favourable to them. Interestingly, market research company Ipsos recently released a whitepaper that found a clear and direct link between corporate reputation and the bottom line.
This research is reassuring news for the public relations industry, with over 87 percent of CEOs actively supporting the role that public relations play in their communications campaigns. Although not a material construct, reputation is believed by those in senior leadership positions to have a clear impact on the commercial performance of their organisations.

This revelation, however, poses two fundamental questions: what exactly is reputation and how does it directly impact financial performance? Such a question might be considered by a diligent CFO who wants to bridge the delta between the profitability of their company and the role reputation plays in this.

Being an inherently immaterial construct, corporate reputation cannot be objectively defined in clear terms. However, reputation is generally accepted as being the fundamental judgements, beliefs and perceptions held by the majority of stakeholders about a corporation or individual. Consequently, this begs the question, how do firms use this to their advantage?

This is where public relations and corporate reputation managers take centre stage. The key to successful reputation management lies in the external communication strategy that a public relations firm can craft and communicate to the world. Understanding the target audience and developing key messages tailored to that market can improve the positive perceptions of that organisation in a way it wouldn’t otherwise have had the opportunity to obtain.

The next stage of the process leverages one of the great tools a communications practitioner has in their arsenal: media relations. A good practitioner should have a close, symbiotic relationship with their media contacts. It’s this relationship which enables an organisation to capture the power of the media and gain the best exposure possible, promoting a positive message to relevant stakeholders.

Ultimately, the link between corporate reputation and financial performance may be aerial but far from tenuous. The requirement is clear: reputation is important enough to put in the hands of experts, and worth investing in.