How investors view your company’s ‘Management Quality’ can add a 15.7% premium to your share price.


Many of the CEOs that we work with feel uncomfortable spending time working on a strategy for their own Brand Positioning and Presentation.

Until we show them the data.

Here are just eight facts that will make any CEO think twice:

  1. ‘Management Credibility’ is the No.1 driver of Investment Decisions among the Buy-Side, and the No.1 influence on Recommendations for the Sell-Side.
  2. In a well-regarded research study, CEO Perception alone influenced, on average, 31.5% of every Analyst’s Investment Decision.
  3. Analysts say that their confidence in the effectiveness of a Corporation’s Leadership will justify them paying a Price Premium of 15.7% on the Company’s Stock.
  4. Equally, those same Analysts say that perceptions of Ineffective Leadership would lead to them Discount the Stock Price by 19.8%.
  5. Together, that Premium and that Discount mean that: perceptions of a Corporation’s Leadership will result in a 35% Variance in their Company’s Stock Price.
  6. Earlier research carried out by one of the world’s most respected specialists in CEO Value discovered through regression analysis that – on average – a 10% improvement in a CEO’s Reputation creates a 24% increase in Market Cap.
  7. Yet another recent Study found that ‘Positive CEO Media Coverage’ results in an additional 7-8% in their Corporation’s Stock Returns.
  8. In one more Global Research Study, Company Employees in 19 countries variously estimated that their CEO’s Reputation accounts for somewhere between 25-60% of their Corporation’s Market Value.

There are many, many more reasons for every CEO to think carefully about how they Position and Present themselves to all their Stakeholders.

But the most important is this:

If they don’t, they are failing their Shareholders.

Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to

A powerful ‘Corporate Purpose’ can increase your company’s stock performance by 7.6% a year.


Recent Analysis finds that 2 components are critical for successful Corporate Purpose projects.

A new research study that has just been summarised in a recent issue of the Harvard Business Review analyses the power of Corporate Purpose to influence a company’s financial performance.

The study analysed 429 companies, carried out proprietary research among more than 450,000 employees, and their findings are fascinating.

Here are just three of their most significant conclusions:

  1. A strong sense of Corporate Purpose does not lead to any improvement in Financial Performance on its own

Companies with a strong Corporate Purpose were judged by their employees’ agreement with statements such as “My work has special meaning; this is not just a job”; “I feel good about the way we contribute to the community” and “I’m proud to tell others I work here”.

Although such companies generated a strong sense of purpose among their employees, and created a workforce that was motivated and engaged, the study found that such companies “weren’t correlated with firm financial performance in either direction”.

In short, strong Corporate Purpose on its own has no significant effect on a Company’s Financial Performance.

But when Corporate Purpose is combined with one other critical Corporate quality, the effect is transformational.

  1. When Corporate Purpose is combined with Management Clarity, however, it significantly improves both Financial Performance and Stock Returns

In companies where strong Corporate Purpose was combined with Clarity of Management Leadership, there was a significant financial impact.

Management clarity was measured by employee comments like: “Management makes its expectations clear” and “Management has a clear view of where the organisation is going”.

The report finds that Companies which combine these two dimensions – Corporate Purpose plus Management Clarity – “exhibit superior accounting and stock market performance”.

In fact, the report found that “a portfolio of high ‘Purpose-Clarity’ firms earn significant positive risk-adjusted stock returns in the future, up to 7.6% annually”.

But it is not simply the combination of Corporate Purpose and Management Clarity that drives this dramatic change.

There is one more critical ingredient that drives Corporate Performance.

  1. ‘Middle Management Engagement’ is the most critical influence in the successful conversion of Corporate Purpose into superior Financial and Stock Performance

Not surprisingly, the research found that “the more senior the employee, the stronger is the perceived purpose of the organisation”, because most senior employees are more involved in the development of Corporate Purpose – and are often incentivised according to its principles.

More significantly, however, the research also found that “it is solely the middle managers and salaried professionals that drive the relation between high ‘Purpose-Clarity’ organisations and financial performance.”

This is because middle management drive the day-to-day decision-making that enables Corporate Purpose to be put into Corporate Practice.

Or, as George Serafeim, one of the authors of the report summarised – middle managers can become:

“Managers who buy into the vision of the company and can make daily decisions that guide the firm in the right direction.”

They convert Management Clarity and Corporate Purpose into day-to-day decision-making:

“This clarity enables the translation of purpose from an abstract idea to specific actions that employees have confidence will be recognised (and rewarded) by their superiors”.

Like many similar analyses, we see that grand statements of Corporate Purpose are worthless without real Employee Engagement translated into daily actions.


Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to

The integrity of a company’s CEO can create a 14% variance in its stock price.


In a recent study (“The Consequences of Managerial Indiscretions: Sex, Lies, and Firm Value”, November 16, 2016) three respected academics have examined 325 separate instances of executive indiscretion, in order to analyse whether they led to any consistent, measurable business impact.

Their conclusions are extraordinary:

“We find that companies of accused executives experience significant wealth deterioration, reduced operating margins, and lost business partners.”

But that’s not all.

“Indiscretions are also associated with an increased probability of unrelated shareholder-initiated lawsuits, DOJ/SEC investigations, and managed earnings”, they explain.

“Further, CEOs and boards face labour market consequences, including forced turnover, pay cuts, and lower shareholder votes at re-election.”

If that sounds extreme, let us explain.

Through Regression Analysis the researchers were able to directly quantify the Business Impact of indiscrete CEO Behaviour:

  1. CEO Behaviour Directly Impacts Their Corporation’s Market Cap

The study found that the announcement of CEO indiscretion leads to a median decline in Market Cap of 4.06% – amounting to an average decline of $226 million for the analysed sample.

But these indiscretions are not just associated with short-term stock price damage, however.

In a separate, earlier part of the analysis, the researchers had discovered the Stock Price at companies that suffered from CEO indiscretions fell by between 11% and 14% over the subsequent 12 months.

So the impact was significant in the short-term – and even more significant over the following 12 months.

  1. CEO Behaviour Directly Impacts Their Company’s Business Performance:

It wasn’t just the Share Price that was hit. Overall Business Performance suffered as well.

According to the researchers:

“The firms in our indiscretion sample exhibit significantly lower operating performance than their industry- and performance-matched peers in the year of the indiscretion”

In fact, they found that CEO Indiscretion led to a decline of 5% in Operating Profit versus their peers.

This was for many reasons, but two of the most significant were these:


CEO indiscretions lead to a 2.1% lower likelihood of their Company acquiring additional major customers in the year following announcement, and:

Business Partners

CEO indiscretions lead to a 5.1% lower likelihood of their Company initiating a new Joint Venture in the year following announcement.

Both Clients and Business Partners were less willing to partner with the companies that suffered CEO Indiscretion.

And the reason for this was critical.

  1. CEO Behaviour Directly Impacts Corporate Reputation:

The Direct Costs incurred by the impact of Indiscrete Behaviour are not material, the study found.

But the Indirect Costs are substantial.

This is for one critical reason:

“For the majority of indiscretion types, reputational costs are the dominant factor”, the researchers conclude, explaining that “a significant portion of the loss in firm value is due to the reputational capital lost when an indiscretion is announced.”

Consequently, among all the distinct misbehaviours exhibited by their sample, one had a much more dramatic impact than any other.

‘Substance Abuse’ had no material effect.

‘Sexual Misadventure’ was minimal.

Even ‘Violence’ caused little impact.

But there was one misbehaviour that accounted for the greatest Business Impact by far:

‘CEO Dishonesty’.

In fact, CEO Dishonesty led to share performance that is 3.9% lower than any other indiscretion.

In an interview explaining their findings, one of the lead researchers – Adam Yore of the University of Missouri – concluded that:

“Our research certainly suggests shareholders and potential business partners perceive that someone who is duplicitous in his or her private life could be more willing to mislead professionally,”

His conclusion was simple:

“Personal integrity at the top matters.”

As ever – CEO clarity, consistency, honesty and integrity are the most fundamental values of all.


Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to

The 10 ways that CEOs must engage with Analysts.


Our latest research provides clear guidelines to help CEOs create more valuable Analyst relationships.

Research has consistently confirmed that perceptions of Corporate Leadership is the No.1 most important influence on Investment Decisions and Share Valuation.

But our most recent research confirms that CEOs do not control the management of Analyst relations with the same discipline as they manage many other – less critical – parts of their executive responsibilities.

We carried out a series of confidential interviews with a representative sample of Buy-Side and Sell-Side Analysts who cover Asia-based Corporates.

Our aim was to identify the most persuasive influences that shaped their positive and negative impressions of CEOs.

And we found that Analysts were consistent and crystal-clear about their requirements from CEO engagement:

10 Principles For Effective Analyst Engagement

Throughout all our interviews there were 10 core principles that consistently created a perception of ‘CEO Added Value’ – regardless of sector.

Different Analysts gave different priorities to each characteristic, but the core guidelines were always the same.

These principles are detailed here, with the relative importance of each principle ranked by qualitative evaluation:

  1. Strategic Clarity

Most important of all, Analysts gave a much higher value to CEOs who were able to communicate a clear, compelling rationale for their Strategic Decisions.

This Strategic Clarity demands a clear, consistent description of their primary Corporate Objective, a persuasive articulation of their Strategic Options, an Option Analysis including their respective upsides and downsides – resulting in a clear, powerful support for their chosen Strategic Direction.

Analysts attributed a significant Premium to those CEOs who delivered impressive Strategic Clarity – and a significant Discount to those who were less effective.

  1. Industry Vision

A CEO’s Vision for the future of their Industry in the mid- and long-term is absolutely fundamental.

Vision determines the potential value of the CEOs entire Business Strategy. It must shape every decision, and every value judgement.

Analysts are obviously specialists in their sector, and they encounter many different Visions of the future, and have access to all relevant data on which to make their evaluations.

Every CEO must therefore be able to clarify a persuasive view of future trends, threats, opportunities & implications, based on facts, presented with power and passion.

  1. Honest Dialogue

Analysts place enormous value on having access to open, one-on-one dialogue with CEOs.

This personal dialogue and relationship shapes trust, confidence and empathy – and enables a clearer understanding of the CEOs Vision, Strategy and Issues.

This dialogue must always be informal, unscripted, one-on-one contact – preferably face-to-face, definitely on con calls.

The CEOs who provide the most personal, unscripted access are invariably the ones who are most confident in their own abilities and decisions, and – consequently – the ones who command the highest ‘Leadership Premium’.

  1. Consistent Delivery

On many occasions, Analysts have found themselves impressed by a CEOs ability to articulate a persuasive Business Strategy based on a convincing Industry Vision – only to hear of inconsistent actions or directions with little advance notice or explanation.

This creates confusion and doubt.

Analysts fully appreciate the need to move fast in order to seize opportunities or mitigate threats.

But they frequently hear of Management Changes, for example, with no warning or explanation.

Not only does this make them doubt the decision, but it also undermines their CEO confidence.

Analysts have most confidence in CEOs who deliver management actions that directly relate to their Vision and Strategy.

And if there are necessary variations, they value advance notice and a persuasive explanation.

  1. Future Focus

The more obsessed a CEO sounds with their Short-Term results, the less confident Analysts feel about their long-term potential.

Institutional investors assign premium value to Corporations with CEOs who have identified a persuasive Industry Vision, a powerful Business Strategy – and the Management Capability to deliver.

The more focus placed on Short-Term results suggests Short-Term problems and Short-Term focus – neither of which, obviously, lead to premium Valuation.

  1. Conscious Transparency

In conversations with Analysts, CEOs often try to avoid, minimise or dismiss developments which could threaten their Vision, Strategy or Plan.

That never works.

It often makes things worse.

Analysts give much more respect to a CEO who is both alert to potential new threats and challenges, honest regarding their implications, and prepared for response.

  1. Competitive Respect

According to Analysts, many CEOs are hardwired to either dismiss the strengths of competitors, or to diminish their threat.

Obviously, Analysts are specialists in their sectors and have a full understanding of the competitive landscape. They are not fooled by a CEOs feigned confidence.

Analysts therefore place a high value on CEOs who are honest, open and respectful.

And, not surprisingly, they have greater trust for CEOs who exhibit a thorough awareness of their competitors’ strengths and threats, because they will be better prepared to defend against them.

  1. Critical Visibility

One of the most common and criticised characteristics of CEOs, it seems, is to ‘disappear’ when there are significant problems, issues or challenges for their business.

When the going gets tough, many CEOs go into hiding.

Yet these are precisely the times when CEO contact and dialogue is most critical and most valuable.

Challenges and Crises are the ultimate test of Vision, Strategy, Transparency, Authenticity and Capability.

These are opportunities to add enormous value to the CEO brand.

The more a CEO hides and avoids contact, the worse the impression of their courage and competence.

And the more they avoid direct dialogue, the more they are missing a valuable opportunity to engage, impress and add long-term personal authority.

  1. Financial Credibility

Many CEOs are more comfortable talking about Vision, Strategy, Management Actions and broad Financial Issues – but are less comfortable leading discussions that drill down into Financial Details.

As a result, they often ‘hide behind the CFO’, leaving responsibility for communication of all financial details to their CFOs.

Analysts, however, have far greater respect for CEOs who are confident debating the numbers, convincing in financial discussions.

This doesn’t mean that they have to lead all finance discussions – of course not.

But they must be happy to lead discussions about the most important financial issues, exhibiting a confident grasp of the most critical details.

  1. Corporate Consistency

It’s critical for Analysts to see the CEO’s Vision and Strategy communicated throughout the Corporation.

The Leadership team must all be aligned, consistently communicating the same principles as their CEO, and presenting Corporate Actions in the context of the Company’s Vision and Strategy.

This obviously applies to direct Analyst Communication, throughout Earnings Calls, AGMs, Conferences and Investor Websites – but also throughout all internal and external messaging.

Analysts have witnessed several occasions where the CEOs Vision and Strategy is not reflected in further Management Dialogue or Corporate Communications.

The result is simple and profound:

CEO Authority and Credibility is immediately undermined, and Market Valuation is eroded.

Analyst Engagement Demands CEO Dedication, Not Delegation.

All these principles are obvious and logical.

But it is truly amazing how often Corporate CEOs fail to follow them.

CEOs should manage their Analyst engagement with the same discipline and dedication as they manage their business.

They should not be led by their CFOs. They should not be led by their IROs. They must lead all engagement themselves.

Yet, precisely because it is one of the few parts of their role that they cannot delegate or direct, it is often one of the hardest for them to apply.


Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to

The 2 most critical Investment Drivers among the Buy-Side – and what they mean for CEOs today.


What really drives the Investment decisions of Buy-Side Analysts? And how should CEOs manage them?

An extraordinary research study among Chief Financial Officers found that ‘78% would “give up economic value” and 55% would cancel a project with a positive net present value—that is, willingly harm their companies—to meet Wall Street’s targets and fulfill its desire for “smooth” earnings’ according to Harvard Business Review.

This is absurd.

It is even more absurd when you read all the recent research into the Investment Drivers of Buy-Side and Sell-Side Analysts.

One of the most recent was released by the world’s leading research company specialising in the Investment Industry.

Rivel Research’s 2015 Global Study of the Buy-Side’s Investment Process was based on extensive interviews with Buy-Side Analysts around the world.

The research is wide-ranging, but deep inside lie some fundamental findings.

And the most fundamental of all was this:

Short-Term Numbers are not the most important drivers of Buy-Side Investment Decisions.

There are two critical influences that are much, much more influential than the Numbers.

I’ll explain what those two influences are in a moment, but first let me share some other important findings:

Big Business Issues Aren’t Necessarily Big Investment Drivers

Interestingly, the research found that many of the most important principles for Business today aren’t particularly important for Buy-Side Analysts:

  1. CSR/Sustainability isn’t important: CSR/Sustainability is clearly the least important of all the 13 Drivers, way down at the bottom of the list, scoring only 22%
  2. Attractive Dividends don’t matter much: They are equally unimportant, right at the bottom, just above CSR, with 30%.
  3. Innovation isn’t fundamental, with ‘Innovative Products/Services’ scoring only 35%.
  4. Corporate Governance isn’t critical: Corporate Governance may be increasingly important within Business today, Buy-Side Analysts don’t see it that way, with Corporate Governance scoring below 50%.

Numbers Count, But They Aren’t The Most Critical

presentation2The most important Financial Measures are  clear:

  1. Cashflow is King; a Strong Balance Sheet is Queen.
  2. Potential Revenue Growth, Sustainable Margins and Prudent Capital Deployment are all important.
  3. Attractive EPS Growth is a little way behind – and Attractive Dividends don’t matter much.

But the two most important Investment Drivers are not Financial.

They are much more important than short-term numbers.

The two most Important Investment Drivers are those that create Investor Confidence and Long-Term Value

The two most important Investment Drivers for Buy-Side Analysts were:

72% Management Credibility

69% Effective Business Strategy


These findings are consistent with earlier Rivel research among Sell-Side Analysts, which also found that the two most important drivers of Sell-Side motivations were ‘Management Credibility’ and ‘Effective Business Strategy’:


Rivel’s most recent study includes the findings from their latest Survey of the European Buy-Side.

And in Europe in 2016, ‘Reliable Cashflow’ was this time rated as the No.1 Investment Driver.

But both ‘Management Credibility’ and ‘Effective Business Strategy’ were ranked as equal No.2 – well ahead of ‘Strong Balance Sheet’, ‘Sustainable Margins’, ‘Attractive EPS Growth’ and other Financial Criteria:


Without question, a Company’s ‘Management Credibility’ and ‘Effective Business Strategy’ are two of the most fundamental influences on all Investment Decisions, for both Buy-Side and Sell-Side.

Which leads to one obvious conclusion:

Listed Corporations must be much as obsessed with creating confidence in their Management Credibility and their Business Strategy as they are with delivering their Short-Term Numbers.

This raises some interesting questions for most CEOs:

  • How much of your time do you spend building your own Management Credibility and shaping your own Personal Brand?
  • How much of your time do you spend building and communicating your Business Strategy, as opposed to implementing it?
  • How much of your attention in Analyst Meetings and Earnings Calls is devoted to the Numbers, as opposed to the most important Investment Drivers of all: Management Credibility and Effective Business Strategy?


Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to

Is your Company prepared for the World’s Biggest Business Risk?

germany-1367107_1920In a world full of Business Risks, one Risk is now more critical than any other.

The world has never been more challenging for Business.

The IMF’s latest report maintains its forecast of a moderate 3% growth in world output for 2017. But it clearly emphasises that “the balance of risks is viewed as being to the downside”.

The “Global Risks Report, 2017” published by the World Economic Forum illustrates the enormous complexity of risks facing the world – and the enormous breadth of risks that confront the world of Business today.

Global politics have become unpredictable. Protectionism has become a potential threat once again. The global environment continues to deteriorate. The regulatory environment has never been more challenging. Competition intensifies in every industry. The war for talent has become more competitive than ever. And cyber-crime is an increasing danger for every business and government.

At the same time, we are witnessing a breakdown of public trust in politics, business and the media.

The world of business is genuinely facing more risks than ever before.

Yet all these risks have combined to create the biggest risk of all.

The World’s Biggest Business Risk

The world’s biggest business risk is consistently identified in four of the most authoritative International Research Surveys in the world, carried out by some of the world’s most respected experts in Business Risk:

  1. Aon

Aon is the largest insurance broker in the world, and last year they published the results of their latest biannual Global Risk Management Survey.

The Survey summarised research among over 1,400 Risk decision-makers from 28 industries in 60 countries, and the results are startling.

Respondents identified no less than 53 significant risks to their business – but the No.1 Risk to business worldwide might surprise you.

It was the Risk of “Damage to Reputation/Brand”.

Reputation Risk was the most important Business Risk across Asia Pacific, North and South America, the Middle East and Africa.

It was the most important Business Risk in Aviation; Banking; Education; Food Processing & Distribution; Government; Insurance; Investment & Finance; Professional & Personal Services; Real Estate; Retail; Telecommunications & Broadcasting; and Non-Profits.

It was the most significant Business Risk across the World and throughout Business Sectors.

Yet these findings merely confirm what previous surveys had already identified:

  1. Clifford Chance/EIU

An earlier Survey commissioned by Clifford Chance – one of the world’s top ten law firms – was carried out by the Economist Intelligence Unit among 320 Board Level Executives around the world. (“View from the Top”)

They were asked ‘Which Risk Categories is your Board currently focussing on?’

The top two answers were:

Financial Risk and Reputation Risk.

These came well ahead of their other Business Risks – Legal, Political, Health & Safety, Environmental, Cyber, Human Rights and Societal/Consumer Activism.

  1. Deloitte

In Deloitte’s earlier “Exploring Strategic Risk” research among 300 C-level executives found that Reputation Risk was cited as the #1 Risk in Business.

A year later, the “Deloitte 2014 Global Survey on Reputation Risk” found that Reputation Risk had become even more important:

In fact, 87% of Executives surveyed rated Reputation Risk as “more important” or “much more important”.

  1. ACE

ACE, the owner of Chubb Insurance and one of the world’s largest Insurance Companies, carried out a survey of 650 EMEA Risk Managers and summarised their findings in their “Reputation at Risk” Report.

The conclusion from these Risk Managers was irrefutable:

81% said that “Reputation is our Company’s most significant Asset” – yet ACE also found that their respondents believed that “they are facing a rise in the Risks associated with Reputation”.

The Most Difficult Risk to Prevent

The primary reasons for the rise in Reputation Risk were generally consistent across all the surveys:

  1. Digital and Social Media now enables news of the slightest Reputational issue to travel around the world at destructive speed.
  2. Reputation Risk is “The Risk of Risks”. Every single other Business Risk can quickly spread to damage a Corporation’s Reputation. As a result, Reputation Risk can come from anywhere in any Corporation, at any time.
  3. Corporate Distrust is leading to relentless Business Scrutiny – from the Public, from Governments, from Regulators, from the Media, from everywhere.
  4. The Breadth of Stakeholders that a Corporation must attend to has never been greater – making it increasingly challenging to provide total satisfaction across all Stakeholder Groups.

For these four reasons – and many others that we shall discuss in later Blogs – it seems for many Businesses that Reputational Damage is a perpetual threat and the most challenging Business Risk to prevent.

The Most Difficult Risk to Manage

Similarly, it is the most challenging Business Risk for most Businesses to manage.

This is for several, interconnected reasons – of which these four are the most obvious and frequently cited:

  1. Definition

Unlike most Business Risks, Reputation Risk is difficult to define and categorise. Because it is seen as ‘The Risk of Risks’, it spreads across all components of a Corporation’s business.

  1. Measurement

Because Reputation Risk has emerged as the world’s leading Business Risk only recently, the tools and methods to measure, monitor and manage it are still evolving.

  1. Preparedness

Most Corporations, therefore, do not have well-established, proven Reputational Risk Management Systems in place. As a result, there is a sense of insecurity in Reputation Risk preparedness.

  1. Insurance

Reputational Risk remains difficult to insure, compared to other Business Risks. Two-thirds of companies in ACE’s sample, for example, said that they “feel inadequately covered for reputational risk”.

Managing Reputation Risk may be challenging, but it’s never, ever been more important.


Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to

Can you afford to lose 20% of your company’s Market Value?


A Corporate Crisis consumes most CEOs. Are you prepared for yours?

According to Oxford Metrica, a strategic advisory firm, every company today faces an 82% chance of experiencing a Corporate Disaster within any 5-year period.

They define a Corporate Disaster as an event that results in a company losing 20% of its Market Value.

So if you believe them – and they are a rigorous analytics company that is respected around the world, so I think you can – your company will experience a sudden and dramatic loss of your company’s Market Value in the near future.

According to another study by the Wharton School of the University of Pennsylvania, a sudden Stock Price drop is not just a short-term problem – it’s a long-term problem.

On average, it takes 80 weeks for a company’s Stock Price to recover after a sudden price drop – that’s 1½ years before the company’s Stock Price recovers to its original value.

If the Stock price fall is the result of Earnings Risk, recovery takes longer: 93 weeks.

If it’s the result of Acquisition Risk, it’s 121 weeks.

If it’s Industry Risk, it’s 137 weeks.

And if it’s Competition Risk, the recovery time is more than 3 years – or 162 weeks.

They also analysed the recovery time by risk, across industries, and the situation is much more extreme for the IT, Utilities and Healthcare sectors.

So the brutal conclusion is this:

  1. Your company will probably experience a Corporate Disaster that could result in a sudden 20% loss of Market Value, sometime in the next 5 years.
  2. After this event, it could take 1½ years on average for your Stock price to recover – maybe more.

Equilar calculates that the average S&P 500 CEO serves just 7.4 years in charge of their company – and just 6.0 years at the median.

So it’s likely that your imminent Corporate Disaster will dominate your tenure.

But recent research has shown how companies with strong Corporate Reputations are less affected by Corporate Crises, and recover from their Crises faster.


Reputation is a Research and Strategy Consulting Firm that advises CEOs of Public Companies how to achieve Fair Valuation for their Company’s Stock. 

If you would like to discuss how we can help you achieve Fair Valuation for your Company’s Stock, please connect with us via our website or by email to