MISSION INTANGIBLE

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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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Cost Muliplier Effects of a Bad Reputation

C. HUYGENS - Tuesday, November 14, 2017
In sports, as in business, a reputation shades everything.
"Given Burfict's history and #reputation, he may serve additional punishment for the incident on Sunday." #risk.

Read more in Business Insider.

Read more on Reputation Impairment.

Equifax Loses Trust, Reputation, and Revenue

C. HUYGENS - Friday, November 10, 2017
The going forward costs of reputation risk include lost revenues and extraordinary operational expenses.
“Nervous corporate clients are putting off signing new contracts until Equifax can assure them its systems are secure. Several have demanded IT audits. ‘We're hoping to win back their trust,’” said CFO John Gamble

Read more in Financial Times.

Read more on Trust.

Defending Reputation from a Weak Position Costs PG&E 19% of Market Cap

C. HUYGENS - Thursday, November 02, 2017
Disadvantaged in the court of public opinion from prior reputation impairment arising from the 2010 San Bruno gas explosion, PG&E is not receiving any benefit of the doubt. Its trailing 1 month returns are 19% below the S&P500.

“The cause of the California wine country fires is still under investigation, but a California power utility is emerging as a possible culprit…On Thursday (Oct. 12), California’s Public Utilities Commission ordered PG&E to preserve all evidence related to the fires, according to the Daily Beast.”

Read more in Quartz.

Read more reputation impairment.

Reputation’s Going-Forward Effects

C. HUYGENS - Friday, October 27, 2017
The lag time between United Airlines' April 11, 2017 reputation risk event and visible effects is typical.

“Our data suggests that the real effects of reputation damage may take up to 13 weeks to first become evident and another 20 weeks to set in.”

Read more in Risk & Insurance.

Read more on reputation impairment.

CEO Cult of Personality Exposes Boards to Reputation Risk

C. HUYGENS - Saturday, October 21, 2017
Cult of personality exposes boards to #reputation #risk

“Any business built on a strong personality [that's] unrestrained can lead to good and it can lead to risk. The point of good governance is to allow the good part of a strong personality to create value while restraining the bad part of a strong personality from creating risk. ”

Read more in Benzinga.

Read more on reputation and Boards of Directors.

Investors (Finally) Discover Costs of United’s Impaired Reputation

C. HUYGENS - Thursday, October 19, 2017
Weak demand in Asia..depressing results; violent (Asian) passenger removal (naively) had little impact on share price—at the time.

“Chicago-based airline forecast…that unit revenues would fall by 1 to 3 per cent…[while competitor Delta] expects the unit revenue measure to rise by 2 to 4 per cent in the fourth quarter. ”

Read more in Financial Times.

More on reputation and United Airlines

Risk of Eponymous Brands: Trump and Weinstein

C. HUYGENS - Tuesday, October 17, 2017
Trump wealth slides $600m on NY property market: Realizing reputation value loss as disdain costs among stakeholders overwhelm support.

“ Bill Gates led the Forbes 400 for the 24th consecutive year, with an estimated fortune of $89bn, $8bn higher than estimated last year. Of the top 10 – all men – Mark Zuckerberg, co-founder of Facebook, saw his net wealth grow the most, adding $15.5bn over 12 months to $71bn.”

Read more in Financial Times.

More on reputation impairment and brand

Uber Acknowledges Cost of a Bad Reputation

C. HUYGENS - Monday, September 25, 2017
Uber CEO Dara Khosrowshahii explains the loss of the company's license to operate in London:

“The truth is that there is a high cost to a bad reputation. Irrespective of whether we did everything that is being said about us in London today (and to be clear, I don't think we did), it really matters what people think of us, especially in a global business like ours, where actions in one part of the world can have serious consequences in another.”


Read more in Inc.

Trump and Timing the Measurement of Reputation Loss

C. HUYGENS - Sunday, September 24, 2017
The loss and stabilization of President Trump's reputation mirrored the pattern seen with event-driven corporate reputation losses, as predicted by Steel City Re on May 19.

Reputation value loss is indemnifiable through Steel City Re's reputation assurance solutions. Determination of the magnitude of the loss is made 20 weeks after recognition of all three triggers of the policy. This time window for discovery of the actual going-forward magnitude of reputation value loss was memorialized in Steel City Re's processes after the empirical study of of tens of thousands of  reputational loss events. The bottom line, is that at around 20 weeks after an event is recognized by stakeholders,  the resuilting corporate reputation stabilizes at its new level. This level becomes the new corporate reputation baseline until a new adverse event or favorably surprise shocks the market and materially resets the reputational value again.

On the basis of this empirical model, Steel City Re predicted in the Financial Times on 19 May that President Donald Trump's deteriorating reputation would stabilize on or about 18 September 2017. Reports from NPR and Rasmussen Reports published on 22 and 23 September confirm this prediction.

From NPR: President Trump's poll slide appears to have stabilized.

From Rasmussen Reports:  The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 43% of Likely U.S. Voters approve of President Trump’s job performance. Fifty-five percent (55%) disapprove.

The latest figures include 27% who Strongly Approve of the way the president is performing and 44% who Strongly Disapprove. This gives him a Presidential Approval Index rating of -17. (see trends).

The Steel City Re model suggests that the current measure of reputational value will be stable until a shock such as a major event on the Korean peninsula or revelations from Robert Mueller’s sprawling special-counsel investigation resets stakeholder expectations once again.

Commander in Chief Reputation Impairment

C. HUYGENS - Thursday, September 07, 2017
Reputation drives  both hope and fear. That is why reputational value impairment can manifest as either dashed hopes or fearlessness.

Microsoft's Smith says in the beginning of 2017, business leaders looked around and wondered how they would navigate this new unpredictable environment. They feared being attacked by the commander in chief on social media. Now, Smith says, "I don't think people get up in the morning worrying about tweets. We have much bigger problems to worry about than that."

Read more in NPR.

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