In Fombrun's view, intangible assets will provide companies with an enduring source of competitive advantage in the future. There is clear evidence that a good reputation gains a company more customers, better employees, more investors, improved access to credit, and greater credibility with government. The importance of reputation to a company's asset base is in part a reflection of a more discerning and critical public. It also reflects a relatively new phenomenon whereby many of the world's leading companies are no longer primarily manufacturers of products but promoters of brands. Image and perception are critical to brand success.
Reputational damage can undermine corporate brands.
The tolerance levels of consumers towards corporate malpractice are much lower now than in the past. The vilification of UK railway franchise operators and the furore over the mis-selling of endowment mortgages and pension products are symptoms of a wider trend. The exponential growth in ethical investment, albeit from a very low base, reflects growing concerns on the part of consumers of financial products about the social and environmental impact of companies they invest in. It is only recently that human rights has become a reputational issue for companies and the subject of coverage in the business media. Public opinion is moving against companies benefiting from forced labour, exploitative child labour, sweatshop conditions and other forms of abusive labour practices.