Oxford Metrica
Résumé: I am delighted to introduce Oxford Metrica’s third briefing on the value impact of crises. Our first report in 1996 focussed on corporate catastrophes and their impact on shareholder value; the results highlighted the critical contribution to value recovery of the leadership demonstrated by senior management in times of crisis. The second report in 2001 updated the previous research, and introduced the notion of reputation and value; the results illustrated the interaction between reputation and value, and measured the increase or decrease in reputation equity from selected crises. The current briefing updates and further extends this body of work.
Since the publication of the last briefing, the world has endured a number of major crises involving mass fatalities, including the 9-11 attack on the World Trade Center in New York and, more recently, the Tsunami tragedy in South East Asia. As this briefing is going to print, the Gulf Coast of the United States is still recovering from the devastation of Hurricane Katrina. We consider it appropriate, therefore, to focus the current briefing on mass fatality events. The results demonstrate that the mass fatality feature of a crisis amplifies considerably the reputation effects, as reflected in the impact on value.
We hope that this briefing will provide corporations around the world with some insights on managing effectively such tragic events and better enable firms to protect value. It is demonstrably clear that doing the right thing is not only an essential part of a corporation’s ethical responsibility, it is also the best way to protect shareholders’ interests.
We are grateful especially to all of those who shared their views on such tragic events and, in particular, to Robert Jensen and his colleagues at Kenyon International who generously supported our work.
