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Corporate reputation in crisis: The impact on shareholder value

Understanding how crisis events impact a company’s reputation and ultimately translate into a loss or gain in shareholder value is vitally important. PwC commissioned Oxford Metrica, which conducts evidence-based research in risk and financial performance, to research the shareholder impact of a major reputational crisis since 1980. Notably, this research was completed before the COVID-19 pandemic of 2020. However, the data set still reveals actionable insights: that the impact of reputation on shareholder value is far broader and more complex than previously thought.

The impact of crises on shareholder value

With shock, comes opportunity. Companies perceived to have responded well to a crisis experience a 25% premium in share value.*

* After 250 trading days, as compared to those perceived to have not responded well.

“Destruction of shareholder value is avoidable, and a reputational crisis can paradoxically provide an opportunity for a company to enhance shareholder value. Ultimately, recovery depends on how swiftly and effectively management responds.”

Hallmarks of ‘winners’: Companies where shareholder value increased post crisis

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Kristin Rivera

Kristin Rivera

Partner, Global Forensics Leader, Global Crisis Consulting Leader, PwC US

David Stainback

David Stainback

Partner, US Crisis Consulting Leader, PwC US

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