Most Australian corporates stay strong while banking sector reputations plummet: study
A large segment of Australia’s corporate sector has increased its reputational strength over the past 12 months, while the image and trust of major banks and some financial services organisations has plummeted.
Results from the 2019 Corporate Reputation Index (RepTrak), show that half the 60 corporates listed now have either ‘strong/robust’, or ‘excellent/top tier’ reputations as defined by the study; an improvement on 2018. By contrast, AMP and the major four banks are all in the bottom 10 in this year’s Index. AMP fell 18 places from last year to rank 60th – the lowest place on the reputational list, with NAB falling 15 places from last year to rank 58th overall, CBA’s spot remaining unchanged at 57th, Westpac falling nine places to rank 55th, and ANZ falling 16 places from 2018 to rank 51st in this year’s list.
The study – which surveys more than 10,000 Australians and has been conducted each year since 2008 by the global Reputation Institute – also shows that Air New Zealand has claimed the title of Australia’s most reputable company in the annual survey for the third year running. It has also appeared in the list of the top 10 most reputable companies for the past six years. Qantas also continued its strong reputational improvement ranking 2nd overall this year (3rd in 2018 and 5th in 2017). Along with the third-ranked JB HI-FI (up three places from 2018), the top three in the 2019 RepTrak® now all have ‘excellent/top tier’ reputations; the highest measure possible, but not achieved by any corporates in last year’s study.
“While there’s clearly been a loss of trust in the four big banks and some major financial services companies, we’re not seeing any flow on effect to the remainder of Australia’s corporate sector. Australians simply don’t view all corporates negatively despite the issues raised about corporate behaviour in the wake of the Royal Commission into Banking and Financial Services. Our research also indicates that we are not seeing signs of impending corporate malaise that some have predicted,” explained Reputation Institute Australia & New Zealand Managing Director, Oliver Freedman.
Freedman said there were several other corporates that saw big improvements in overall reputation in this year’s index. Highlights include:
– Woolworths improved 14 places to rank 8th overall – its highest rank since tracking started in 2008, and just 2 places behind ALDI (ranks 6th) which has the strongest reputation of the three major supermarkets
– Crown Resorts ranked 34th after placing 50th in the 2018 index
– Lendlease and Myer recorded the biggest improvement in overall rankings; both rose 18 places to rank 27th and 35th respectively after declines in 2018.
– Coca-Cola Amatil and 7-Eleven both rose 12 places to rank 44th and 46th respectively after both recorded declines over the past couple of years
Freedman explained that in addition to measuring overall reputation, the Australian RepTrak® also looks at how Australians feel about the country’s top 60 companies on the seven individual drivers of reputation; Products/Services, Innovation, Workplace, Citizenship, Governance, Leadership and Financial Performance, and ranks them accordingly.
This year, Woolworths saw large improvements within these individual dimensions, now ranking first for Citizenship. Bendigo and Adelaide Bank also rose seven places to rank 11th on overall reputation, an improvement that Freedman said was due to strong performances in the individual measurements of Citizenship and Governance. “This proves that you can be a bank and still have a strong reputation if you are focussed on reputation drivers that resonate with customers and increase trust,” he said.
By contrast, AMP ranked last across all the seven dimensions. BHP also saw a sharp fall in overall reputation, falling from 30th last year to 45th overall in this year’s rankings.
“In the past 12 months we’ve seen many issues raised about corporate behaviour and consumer trust. As a result, the reputations of our major banks and some financial services organisations have taken a major hit. But our research clearly shows that those corporations that consistently stay focussed on strong performance across all the reputation drivers can not only weather these storms but come out on top. The banking sector has a long road to recovery and could learn a lot from those with consistently strong rankings, like Qantas and Air New Zealand,” he said.
“Similarly, those organisations that are listed in the bottom 10 rankings along with the banks, such as Rio Tinto, ATO, Foxtel, Telstra and News Corp, would also do well to examine their reputation approaches carefully, or we may continue to see the divide between weak and strong reputations widen,” Freedman concluded.
