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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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GSK: Ethical pharmaceuticals discover ethics

C. HUYGENS - Thursday, December 19, 2013
In a comment on Glaxo Smith Kline (GSK) on the Society's Linked-In page, reputation consultant Andrea Bonime-Blanc wrote, "Sometimes it takes scandal to make progress: after serious fines and scandals, GSK's CEO has just announced potentially groundbreaking steps connecting the most important dots of good corporate citizenship: desired employee behaviors to performance incentives such that overly aggressive sales targets and bonuses no longer lead to unethical or illegal behavior. Time will tell but this is extremely promising." Do the metrics bear her out?

The Consensiv reputation metrics, powered by Steel City Re's measures of reputational value, reflect stakeholder expectations and their economic effects. Of the 30 firms in its sector, Major Pharmaceuticals, Glaxo Smith Kline has generally hovered above the third quartile of the metric, Reputation Premium. Its most recent value was the 76th percentile. Its stakeholders are confident that this premium is appropriate as evidence by an extremely low Consensus Trend metric of 1.4%.  The Consensus Benchmark,which is based on a one-year average standard deviation of the Reputation Premium, indicates at 3.4% a progressively more stable course.

The data suggest that the "don't be unethical" strategy is being believed by stakeholders; it is not clear if that leaves them assured that the company's ethics are yet worth valuing at a greater premium.

For more background on the Consensiv reputation controls, click here. To view the November 2013 reputational value league table, based on Consensiv's metrics, and available exclusively at CFO.com, click here.

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