This Month in Reputation: Burritos are Back, Toymakers Reign Supreme, and CEOs Must Adapt

The LEGO Group Tops Google and Disney to Earn Reputation Honors

In this year’s Global CR RepTrak, The LEGO Group ranked number one among international corporations as reputable in terms of corporate responsibility. 

The report looks at how a company manages its Workplace, their socially-conscious initiatives, and how its Governance impacts the global marketplace. In a time where consumers are as concerned about environmental and social impact as they are about price points, such rankings can have a significant influence on a company’s bottom line. 

"To put it simply," Stephen Hahn-Griffiths, the Reputation Institute’s Chief Reputation Officer told The Wall Street Journal, "corporate responsibility is no longer just a measure of goodwill, it's a measure of being a good business."

Corporate responsibility, according to Hahn-Griffiths, drives about 40.5% of a company's reputation, while financial performance accounts for about 12.9%.

Improvements in reputation metrics often leads to major gains in other areas. A five-point corporate-responsibility increase translates into an 8% increase in purchase intent. A five-point corporate-responsibility increase boosts trust by 6%.

Previous holders of the top spot, Google, saw their reputation take a hit due to employee walkouts and data breaches. Starbucks, on the other hand, made its way back into the top 100 following a few years in the wilderness due to the company’s questionable handling of a racially-charged incident in a Philadelphia store.

Chipotle is Back On Top After E.coli  Outbreak and Data Breaches

Less than two years ago, the once-mighty fast-casual burrito chain seemed like it might be in permanent decline; its stock price was down nearly two-thirds from its 2015 peak of $750, following an outbreak of e.coli in its restaurants. Once this crisis had passed, Chipotle was hit with another, as data breaches wreaked havoc on locations in five states in the first quarter of 2017. 

Increasingly, it felt like customers would be foolish to trust Chipotle with either their personal data or their digestive system. It was a serious controversy for a company once known for its emphasis on ethical eating and sustainability. 

Under new CEO Brian Niccol, however, happy days are here again, as Chipotle recently saw its stock price sore to a new high of nearly $850

This new momentum comes courtesy of a renewed focus on food safety, ensuring that the dark days of 2015 never return, as well as an innovative “stage gate” system for evaluating new ideas. This ensures that only the best and most well-thought-out initiatives are rolled out nationwide. Lately, that has included the appearance of a limited-edition menu item (carne asada), as well as the roll-out of a new app and delivery options. 

Climate Activist Greta Thunberg Gets Remixed, and Over 3 Million Views

The Swedish teenager who spoke before the UN this month about the urgency of the climate crisis, was turned into an even bigger internet sensation when her speech was turned into a “death metal” song

The remix went over well with Twitter and YouTube, as well as with Thunberg herself, who just recently traveled to the U.S. on a sailboat in order to be avoid any negative environmental impact. 

"I have moved on from this climate thing…," she sarcastically Tweeted. “...from now on, I will be doing death metal only!!"

Embattled Wells Fargo gets an outside CEO to help right its rickety ship

It’s been a long and difficult half-decade for Wells Fargo. Since 2016, the formerly blemish-free bank has been embroiled in a new scandal almost every year. Following the departure of CEO Timothy Sloan, who had been promoted from within the company, the board determined that it would need an outsider to come in and straighten out its increasingly backward company culture. Warren Buffet himself declared that they should look for someone outside of Wall Street. 

Well, the search is over, and BNY Mellon’s Charles Scharf, 54, will assume the role of CEO on October 21st. While an outsider to Wells Fargo, he’s no stranger to Wall Street; he was the head of Visa for four years, and once oversaw the private investment arm of J.P. Morgan Chase. 

In his initial statement, Scharf made it clear that he understands the enormous task that lies ahead of him, and that his first priority is re-establishing trust. 

“I am committed to fully engaging with all our stakeholders, including regulators, customers, elected officials, investors and communities,” he said. 

In an unusual move, Wells Fargo’s main regulator, the Office of the Comptroller of the Currency, wrote to the bank to inform them that they did not object to Scharf’s appointment. 

Several CEOs Learn that While Inspiration Matters, So Does the Bottom Line

By now, we’ve become accustomed to tech CEOs explaining earnestly how their company isn’t just about making money or improving communications; it’s about “changing the world,” and “connecting people.” 

This past month, however, several CEOs accustomed to using lofty rhetoric to describe relatively mundane business functions learned that such rhetoric doesn’t keep shareholders happy

The CEOs of WeWork, Juul, and eBay all lost their jobs because, while their language may have been elevated, their company’s stock price and valuation weren’t nearly high enough. 

Our research shows that the pursuit of profit without thought of the social costs or ethical concerns involved is a recipe for disaster. The opposite is true as well, though. When a company is so focused on ideals or mission statement, it risks forgetting why it’s in business at all: to make money and deliver value. 

It’s only when a company balances both goals, to meet a customer's needs and also do good business, that they can be truly successful in the long term. 

Public Opinion has Shifted Quickly on President Trump and Impeachment

For much of the current presidential term, and throughout the investigation of Special Counsel Robert Mueller, most Americans were cold on the idea of impeaching President Trump. As recently as of this July, more than 50% of Americans opposed it

In the past couple of months, as bombshell after bombshell has dropped regarding a phone call between President Trump and the Ukrainian government regarding Vice President Joe Biden’s son, the poll numbers regarding impeachment have flipped: now more than 50% support impeachment. This is even the case among Republicans, with nearly 15% supporting impeachment in some polls.

In the case of a president whose reputation has been consistently news-worthy, not having a consistently strong reputation is what's failing him now when he needs it most.

To learn more about how to avoid negative reputation headlines, access our latest data & insights from the 2019 CR RepTrak study.

Download Report

 

Melanie LoBue 
Senior Director of Global Marketing
Reputation Institute
mlobue@reputationinstitute.com
@melanielobue

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Summary of Global 2019 CR RepTrak Study
Summary of Global 2019 CR RepTrak Study

Corporate Responsibility Drives “Good” Business.