RATING RESEARCH LLC (RRC) has expanded its Reputation Strength Rating
Series to include an Ethics Reputation Rating on leading companies within
the Electric Power Industry. The analysis of ethics focuses on measuring
the overall impact of corporate ethics on corporate reputation in the
marketplace as a whole. Thus, rather than taking a traditional approach
to the management of ethics in which the primary focus is internal and
compliance-driven, RRC is interested in examining the external manifestations
of what is considered ethical corporate conduct.
To assign these ratings, RRC started with the findings contained in
the core reputation database compiled from the responses of senior industry
executives and financial analysts used as a basis for its Reputation
Study of the Electric Power Industry and then conducted incremental
interviews and analysis to create a more precise ethics measurement.
Additionally, RRC performed an in-depth analysis of business and financial
media to secure timely input for consideration in assigning each company’s
definitive Ethics Reputation Rating. In some instances, RRC’s
incremental research resulted in significant changes (both positive
and negative) in companies’ rankings on ethics reputation issues
relative to the original findings in RRC’s earlier Reputation
Study.
Importantly, RRC’s research confirms the statistical significance
of ethics on a company’s overall reputation. Specifically, its
statistical analysis indicates that external perceptions of a company’s
business ethics account for approximately 28% of the total in determining
the degree of support a company may expect to enjoy during periods of
controversy; 20% in determining whether a company’s securities
are perceived by industry executives as attractive investments; and
22% of the total in determining a company’s overall reputation,
i.e., the extent to which it is perceived as an “excellent company”.
It is RRC’s conviction that the publication of Ethics Reputation
Ratings and summary research information will help to satisfy the increasing
demand expressed by business executives, investors, and the public at
large for reliable information on companies’ ethics reputations.
For further information, please contact Matthew
Molé.
