A firm’s reputation along with its brands, is its most important intangible asset. In fact, it can be argued that financial statements are less reliable as a measure of corporate performance and value than the return on intangible assets- such as corporate reputation.
Evidence suggests that a substantive portion of the average publicly quoted market value is based on non-financial assets- higher in service and technology companies- and that in the unpredictable financial markets that exist today, a positive reputation may be the one factor that differentiates a company from its competitors when a market sector falls. Good reputation provides specific advantages such as premium pricing, advocacy, attraction and retention of top talent, investor security and favourable treatment from the media and other stakeholders.