The Most Reputable Companies in the World

[David Blanchard]

In another thread we’re looking at the worst companies in the world, so it’s only fair that we also take some time to look at some of the best. According to a study conducted by the Reputation Institute (not to be a wiseguy, but I’ve never actually heard of this institute, so they might need to work on their own reputation), the most reputable company in the world right now is Italy’s Ferrero. No, not the maker of sleek, fast cars – that’s Ferrari. Ferrero is the maker of Tic Tac breathmints and Nutella spread.

So what is it exactly that makes a company “reputable”? According to the Institute’s research, a company’s reputation can be tracked like anything else, so they’ve come up with an index called the Global Reputation Pulse that is calculated by averaging perceptions of four indicators—trust, esteem, admiration and good feeling—based on the input from at least 100 local respondents who are familiar with the company. Scores can range from a low of 0 to a high of 100.

As the Institute sees it, excellent reputations are built across seven dimensions of reputation management: Products/Services, Innovation, Governance, Workplace, Citizenship, Leadership and Performance. The most reputable companies, then, by definition address all seven dimensions. As it turns out, Ferrero is the only company that is in the top five on all seven dimensions.

The most influential factor on the reputation gradient, according to the Institute, is Product/Services, followed by Governance. However, a well-balanced company really needs to address all seven dimensions to earn an excellent reputation.

“Companies that manage their reputation on a single dimension can falter when the tide turns against them,” points out Kasper Nielsen, managing partner, Reputation Institute. “In contrast, companies that manage reputation broadly across several dimensions establish a solid emotional connection with stakeholders that will lead them to support the company both vocally and monetarily in any scenario.”

Last year’s most reputable company, Toyota, saw its ranking plunge to 59th, thanks in no small part to the collapse of the entire automobile industry, as well as Toyota’s own travails over the past year, which included reporting its first annual loss ever. Nevertheless, Toyota’s reputation as a global automaker is still relatively strong, lagging only the likes of Indian conglomerate Tata (# 11), rival Japanese automaker Honda (# 18), and two brands virtually unknown in the United States: China Faw (# 22) and India’s Maruti Udyog (# 49). No American automaker placed in the top 200 global companies.

As the Reputation Institute explains, the largest companies in the BRIC countries tend to enjoy a stronger emotional connection from consumers than their counterparts in the industrialized world (i.e., the U.S., Japan, U.K., France and Germany). The U.S. companies with the best reputations are two manufacturers largely synonymous with children: Johnson & Johnson (baby powder) and Kraft Foods (macaroni & cheese).

To the surprise of probably no one, the company that took the biggest hit to its reputation over the past year was U.S. insurance company AIG, which many point to as a catalyst for the financial crisis.

Here’s a look at the top 25:

1 Ferrero (Italy)
2 IKEA (Sweden)
3 Johnson & Johnson (U.S.)
4 Petrobas (Brazil)
5 Sadia (Brazil)
6 Nintendo (Japan)
7 Christian Dior (France)
8 Kraft Foods (U.S.)
9 Mercadona (Spain)
10 Singapore Airlines (Singapore)
11 Tata (India)
12 UPS (U.S.)
13 General Mills (U.S.)
14 El Corte Inglés (Spain)
15 Matsushita Electric Ind. (Japan)
16 FedEx (U.S.)
17 Grupo Bimbo (Mexico)
18 Honda Motor (Japan)
19 Whirlpool (U.S.)
20 Votorantim (Brazil)
21 Walt Disney Co. (U.S.)
22 China Faw (China)
23 Google (U.S.)
24 China Merhchants Bank (China)
25 Caterpillar (U.S.)