Proving the Priceless: Making Reputation a Boardroom Metric

Echo Research, a communications and reputation research firm that has measured the financial value of corporate reputation for more than 15 years, has found that reputation now accounts for 27% of market capitalization across the US financial services sector, worth an estimated $1.16 trillion.

Sandra Macleod, Echo's group CEO, discussed the findings and the methodology behind them in a conversation with Ashley Jones, Head of Financial Narrative. Download the report and follow the conversation below.

Key takeaways

• Reputation accounts for 27% of financial services market cap in the US, worth $1.16 trillion in shareholder value.
• Echo Research's model regresses roughly 79 financial variables against perception data from Fortune's Most Admired Companies and Britain's Most Admired Companies studies.
• Across the market, 92% of companies generate reputation value while 8% destroy it, wiping out $91 billion.
• Three things stop reputation from reaching the boardroom agenda: measurement, unclear ownership across departments, and evidence that arrives after decisions are already made.
• Financial services carries a higher reputation premium than most sectors because trust is the product itself, not a factor behind it.
• AI is making credibility scarcer and more valuable, even as it becomes a top growth priority for the same companies.

How much of financial services market value comes from reputation?

Reputation accounts for 27% of market capitalization across the US financial services sector, placing the industry third among all sectors measured, behind basic materials and healthcare. Echo Research puts the total value at $1.16 trillion.

Macleod said the number should not surprise anyone working in the sector. Financial services companies are not primarily selling a product. They are asking investors, customers, and regulators to trust them with money. "What you're actually selling is not so much 'buy my product,' it's actually 'trust me, I will look after your finances,'" she said. "Whether you're an asset manager, whether you're an insurance company, you're basically saying, 'Trust me.' And that is what you're selling and that is what you're measuring."

By contrast, sectors operating closer to monopoly conditions, such as regulated utilities, show a much smaller reputation effect, since customers have limited ability to act on trust or distrust by taking their business elsewhere.

How does Echo Research actually calculate this number?

The model starts with roughly 79 financial variables reported by every listed company on major market data terminals, including earnings, EBITDA, and dividend data. Echo aligns that data across the index at a stable point in the market cycle, avoiding periods of unusual volatility such as an election or a war, so the comparison holds across companies.

That financial data is combined with perception data drawn from long-running studies of informed investor and business audiences, primarily Fortune's Most Admired Companies in the US and Britain's Most Admired Companies in the UK, which Echo runs in partnership with the London Stock Exchange. Regression analysis then isolates which variables explain market capitalization beyond the company's raw financial fundamentals. Macleod said the analysis typically narrows down to around 15 variables that consistently explain the bulk of market cap across an index of roughly 600 companies.

Which variables matter most shifts over time. Macleod pointed to the COVID-19 pandemic as an example, when investors placed unusually high weight on trust and long-term belief in a company's leadership, even when short-term financial performance suffered. Today, she said, investors are asking for more direct proof behind a company's narrative, particularly around innovation and sustainability claims.

Why do boards still treat reputation as a lower priority than other financial risks?

Reputation touches revenue, margin, risk, talent, and investor confidence, yet Echo's research consistently finds it discussed last on board agendas, if it is discussed as a distinct topic at all. Macleod identified three reasons.

The first is measurement. Boards have generally understood that trust and reputation matter, she said, but have not had a reliable way to quantify them until relatively recently.

The second is ownership. Reputation cuts across risk, HR, communications, and strategy without belonging clearly to any single function. Macleod said interest in quantifying reputation increasingly comes from the risk side of organizations, where leaders want to understand the cost of getting reputation wrong, including scenarios such as poor succession planning.

The third is language. Communications teams have traditionally reported activity metrics, such as media impressions, that do not translate into board-level financial terms. Macleod said the shift underway is toward CMOs and CCOs working together and bringing data that ties communications work directly to enterprise value, which changes how the function is received at the board level.

What does a reputation value analysis look like in practice?

Macleod described a case study involving a healthcare company facing product recalls at the same time its long-term value proposition remained strong among investors. When Echo mapped the company's reputation drivers, product and service quality showed up as the single biggest drag on market cap, a direct result of the recalls. That finding pointed to an operational problem, not a communications one. The company needed to fix the underlying issue and then communicate the changes it made, not attempt to talk its way past it.

The same analysis showed innovation was an underused strength. The company held a large number of patents but rarely discussed them publicly. Unlike the product recall issue, Macleod said, this was not an operational problem but a communications gap, since the innovation already existed and simply had not been connected to the company's broader story. Following the analysis, the board adopted innovation as one of its strategic growth pillars, and communications took on the role of coordinating how that message was carried across the organization.

Macleod described this kind of analysis as identifying an organization's reputational DNA, distinguishing which drivers of value are strong, which are weak, and whether a weakness reflects an operational problem that needs fixing or a communications gap that needs closing.

Why do some companies destroy reputation value while most create it?

Echo's research finds that 92% of companies generate reputation value, while 8% destroy it, a group that collectively erased $91 billion in shareholder value. Macleod said the causes behind that destruction vary.

Some companies face a single, identifiable crisis. Others show a slower decline that becomes visible well before the company fails, which Macleod said Echo's data can often flag in advance. In some cases, the issue is less about company performance and more about a mismatch between audiences. Macleod cited Southwest Airlines as an example of a company whose customers are highly engaged and loyal, while its investor base has historically viewed the company differently, creating a persistent gap between customer sentiment and market value.

Macleod also cautioned that an unusually high reputation contribution is not always a positive sign. A company whose market cap depends heavily on expectations about future potential, rather than a broad base of demonstrated strengths, carries more risk if that narrative shifts.

Is AI making reputation more or less important?

Macleod described a genuine tension in how companies are approaching AI. Her report finds that a flood of AI-generated content is making credibility scarcer and more valuable, even as AI adoption ranks among the top opportunities companies cite for growth.

She said no company has clearly solved this tension yet, and most organizations are still working through it. AI can produce content at scale, but that abundance does not guarantee the content lands or is trusted. Audiences are increasingly asking where content comes from and whether it holds up, a shift Macleod said will make trust and reputation more important over time, not less.

She pushed back on the idea that AI could replace a communications function entirely. Fact-checking, human judgment, and the ability to defend a position remain necessary regardless of how content is produced. "We're a firm believer in the importance of strategic communications and the value that it brings organizations that often has gone so underrecognized," she said.

What should financial marketing and communications leaders take from this research?

Macleod's central message is that reputation should be managed as a financial asset, not treated as a soft or secondary consideration. "You're not just managing a narrative for the organization," she said. "You are managing a really important financial asset that needs protection. It needs the resourcing, it needs the recognition that goes with any major asset."

She argued that communications and marketing leaders are well positioned to guide organizations through decisions about where reputation risk exists and where it does not, particularly as AI reshapes how trust is built and lost. Framing that role around financial value, rather than activity metrics, is what she sees as the most important shift for the profession going forward.

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