How To Avoid A Corporate Reputation Crisis

This post originally appeared on Forbes on November 3, 2025

In a time when trust in business is declining — Edelman reports an “unprecedented global decline for employer trust” — and a general feeling of being aggrieved by our employer rises, how can leaders understand what is causing this reputation downfall? It’s easy to blame a bad product launch, a CEO scandal, or even a poorly timed statement on social media. News of mass layoffs, such as Amazon’s recent announcement to layoff 14,000 people, certainly doesn’t help. But the real story of corporate reputation is more complex, and is one shaped by subtle perceptions of competence, character, and the collective judgments of others.

Dr. Patrick Haack, Director of the HEC Research Center for Grand Challenges at the University of Lausanne, specializes in legitimacy and has conducted much research into corporate reputation. He’s very honest that, academically speaking, the field of corporate reputation is ill-defined. That’s largely because there are many different constructs, definitions, and ways to measure reputation. That said, the key components to consider when thinking of corporate reputation are legitimacy, status, and stigma.

“Something that is helpful is distinguishing between capability reputation and character reputation,” says Haack. Capability is related to competence, and in the corporate world, we largely link capability to a company’s financial performance and quality of service and/or product. Character reputation is more about integrity and trustworthiness. But which dimension is more important in driving a positive corporate reputation?

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