That said, leaders should make sure that guarding the company’s reputation is among the organization’s highest priorities. ![]() Many of the executives I interact with think that Occupy Wall Street is a movement confined to a handful of disgruntled hippies. This means most people, including employees, assume that business leaders are acting out of self-interest and not for the good of society. Polls show that 70% to 90% of people in the US do not think that business does a good job of balancing profit and the public interest. That’s especially true today because corporations are held in such low regard. The opposite is true for companies with bruised reputations. And extensive research from the Reputation Institute, among others, shows that companies with strong reputations can charge more for products and services, pay less to suppliers, hire the best recruits, enjoy more stable revenues, and be given the benefit of the doubt by constituents when things go wrong. Why do otherwise intelligent people seem to believe that they are protecting their reputation by covering up the truth when they are actually making things even worse? And, what can you do to make sure you are assessing reputational risk as seriously you do financial and legal risks to your institution? The three are related, after all. And just this past weekend, the Times reported that the FDA spied on its own scientists to catch whistle-blowers who leaked evidence that the agency had employed faulty review processes that led to the approval of potentially dangerous imaging devices. Just a few months ago, the New York Times revealed that Walmart senior executives hid evidence of widespread bribery in its Mexican expansion effort. How could he have thought that covering up Jerry Sandusky’s repeated offenses would help him reach that goal?Īfter studying the topic of reputation for over a decade, I see Paterno’s behavior repeated again and again in the corporate world. In the report, Freeh’s investigators pointed to “a pervasive fear of bad publicity” as one of the main reasons Paterno and former Penn State president, Graham Spanier, allowed such heinous acts to go unreported. Last Thursday, former FBI head Louis Freeh released a report on the child abuse scandal at Penn State that dealt a devastating blow to the university and to the legacy of the once revered football coach, Joe Paterno.
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