Some of the most profitable companies in the world also have poor reputations.
ExxonMobil, for instance, is No. 1 on this year’s Fortune 500, overall and in terms of profits. The oil giant unseated Walmart, which held the top spot last year. The big box retailer is No. 10 on the list of most profitable Fortune 500 companies.
But on a list that measures reputation, the oil giant ranked near the bottom, as did Walmart and several other companies that are among the Fortune 500’s most profitable.
“The disparity between reputation and profit has got to be a concern,” said Peter Himler, principle of Flatiron Communications.
PR Daily compared the 10 most profitable companies on this year’s Fortune 500 with the organizations listed on the 2012 Harris Interactive Reputation Quotient, a study that asks 30,000 Americans to identify the most-visible companies and then rate them based on their reputations in 20 attributes, including emotional appeal, products and services, social responsibility, and more.
The company with the best reputation is No. 1—this year it was Apple—while the worst reputation is No. 60, which was AIG.
Here are the 10 most profitable companies on the Fortune 500 and their rank on the Reputation Quotient:
1. ExxonMobil – No. 51.
2. Chevron – No. 46.
3. Apple – No. 1
4. Microsoft – No. 9
5. Ford Motor – No. 25.
6. J.P. Morgan Chase & Co. – No. 56.
7. American International Group (AIG) – No. 60.
8. Wells Fargo – No. 52.
9. IBM – No. 23.
10. Walmart – No. 41.
What does it mean that so many of the most-profitable companies also have such dismal reputations? Blame their size and exposure, said Fraser Seitel, president of Emerald Partners.
“These are, by virtue of their size, the most ‘visible’ companies in the world,” he told PR Daily in an email. “So whenever they mess up, as Walmart did most recently with its bribery scandal, all the good that they do gets swept away in a sea of renewed public loathing.”
Seitel compared restoring a company’s reputation to turning around a battleship—it takes time.
“For example, Exxon’s awful Valdez oil spill happened decades ago, but the company is still being punished perceptually,” he said. “Exxon in recent years has made great strides—in engaging critics, particularly NGOs, and in speaking out, through social media and media relations—to resurrect its reputation.”
A recent book about Exxon, “Private Empire” by New Yorker writer Steve Coll, suggests the company hasn’t gone far enough. An inside joke at ExxonMobil is that it’s media strategy is learning to say “no comment” in 50 different languages, according to a New York Times review of Coll’s book. The oil company’s Dallas headquarters is referred to as the Death Star.
Of course, Exxon isn’t the only company among the 10 most profitable companies to suffer bad PR or, worse, outright scandal. It has touched more than half of the organizations on the list. Oil companies take flak for any number of reasons—from rising gas prices to melting glaciers. Walmart, as Seitel mentioned, is caught in a bribery scandal. The reputations of AIG, JPMorgan Chase, and Wells Fargo have suffered due to the financial crisis and the ongoing fallout.
(Apple has also felt cracks in its image thanks to the Foxconn mess, but the Reputation Quotient surveyed consumers prior to the story gaining prominence in the news.)
None of those examples proves that these are bad companies, but they do cause people to think negatively of them.
And yet the organizations still earn profits hand over fist. What’s the deal?
“Consumers vote with their wallets based on their immediate needs and wants,” explained Lorra Brown, an assistant professor of public relations at William Paterson University. “In our consumption-based society, consumers may say they hate Walmart, but if the prices are cheap, they’ll still shop there.”
She added: “Unfortunately all investors and corporate leaders aren’t as worried about being responsible organizations, just the bottom line and short-term vs. long-term business goals (cutting costs, laying off workers, etc.).”
Himler is hopeful. He sees the pendulum swinging from a focus on profits to one of good corporate citizenship. “There is a movement afoot for doing well and doing good,” he said.
From a crisis communications perspective, doing well and doing good is a smart PR move. “A lot of companies will say that if we spend money on good programs, we’re taking away from our financial shareholders,” Himler explained. “These companies come under crisis and they’ve done nothing—they’re going to take it on the chin more than a company that’s a good corporate citizen.”