24 of the 40 DAX companies have a weak reputation

Reputation is much more than a communication issue, but means a change in corporate culture. It is the sum of the performance of the products plus the decency of how companies treat employees, plus communication, says study author Jörg Forthmann. “Reputation reflects the level of performance of a company and the social approval of whether it is allowed to make profits.”

Companies with a high reputation even benefit from the stock market. In Switzerland, a study by the University of Zurich and the consultancy Commslab shows that the shares of the 20 companies with the highest reputation rose by 145 percent between 2006 and 2020, while the increase for all companies was only 32 percent – a difference of 113 percentage points . Including dividend income, the difference was 156 percentage points.

Many companies are aware of this benefit. 80 percent of top managers consider reputation to be a very important issue, says market researcher Forthmann. However, only every tenth company in Germany has professional reputation management.

SAP has the best reputation among DAX companies

SAP is also one of these. According to the IMWF, the software manufacturer enjoys the highest reputation in the Dax with 95 points. Various areas such as communications, investor relations, government affairs and the strategy department are working on the topic and regularly exchanging ideas with customers, partners or investors, SAP said upon request. “Our reputation is an important pillar for long-term sustainability.”

For reputation experts, the approach is exemplary. According to experts, many companies make the mistake of anchoring the topic solely in the communications department. However, you can only try to create a good reputation through marketing measures. The fact that this actually exists, for example in product quality or in dealing with employees, is an overarching issue.

Reputation consultant Bernhard Bauhofer therefore recommends tackling the issue in top management or in the strategy department. “This is the only way the reputation project can have the necessary impact and be anchored systemically,” says the managing director of the consulting firm Sparring Partners.

He recommends conducting regular surveys of all stakeholders to measure reputation development. Employees also need to be trained. It takes several years to build a solid reputation. But that contradicts the often short-term success interests of listed companies, says Bauhofer.

For study maker Forthmann, SAP’s high reputation paid off in the half-year figures. Despite mixed results, many analysts and shareholders remained optimistic. SAP also benefits from relying on future technologies such as AI. The group has entered into collaborations with large tech companies.

A good reputation doesn’t mean that there are no more problems in a company – but it can help to deal with them. SAP is cutting around 3,000 jobs and wants to strengthen its business with business software. This causes unrest among employees and criticism from some customers.

Eight million statements examined using AI

Mercedes-Benz, BMW, Siemens and Fresenius also took the top spots in the ranking. For Siemens, reputation is “important for attracting new employees, especially when they are highly competitive.” In addition, one benefits from “greater flexibility on the financial markets”.

A significant part of the reputation is created by the image that is conveyed in the media and in social media posts. Ulrich Bihler (reputation researcher)

The IMWF institute, which belongs to the company Aktuellkontor and is therefore part of one of the largest PR agencies in Germany, examined the reputation of 341 listed companies worldwide. The authors evaluated all communication in the first quarter of 2023 using artificial intelligence (AI), which was carried out by the companies in English and German on news sites or social networks such as Twitter’s successor X.

The statements were assigned to the five reputation categories of sustainability, employees, business, management and product and service and were weighted approximately equally. The company with the best reputation in one dimension received 100 points there, others were ranked accordingly.

This approach is common in reputation research. “A significant proportion of reputation is created by the image that is conveyed in the media and in social media posts,” says Ulrich Bihler, who teaches reputation management at the University of Hohenheim. In order to get a complete picture, surveys of investors, customers or employees would have to be carried out.

MTUHannover Re, Vonovia, Deutsche Bank and RWE are behind

At the bottom of the rankings with less than 30 points are the engine manufacturer MTU, Hannover Re – as well as Vonovia, Deutsche Bank and RWE. The last three are also at the bottom of the Caliber rankings. The Danish provider determines reputation through surveys.

RWE refers to the investigation period. In the first quarter under review, reporting on RWE was dominated by Lützerath. The company had evacuated the village in the Rhenish lignite mining area despite resistance from activists. Vonovia reports that many people are “uncertain” because of expensive housing prices. However, the feedback from tenants is perceived “significantly differently” than the study shows.

Deutsche Bank declined to comment on the results. Although it enjoys a very good reputation when it comes to economics, it falls behind in other areas. MTU and Hannover Re perform poorly in all categories. Both B2B companies explain this by saying that they do not have any high-profile end customer business.

They complain that the authors found too few statements about them in three of the five categories – this does not allow any conclusions to be drawn about their reputation. Experts like Bihler disagree. “Companies can only build a reputation if they have a certain level of public awareness.”
Collaboration: Christof Kerkmann

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