New York (Aug. 1, 2013) – CFOs and other finance leaders around the world are putting corporate reputation first, with more than three quarters, 76 percent, of Chartered Global Management Accountants surveyed by the American Institute of CPAs and Chartered Institute of Management Accountants saying their organizations are prepared to lose profit in the short term to protect their images over the long term.
The finding comes as organizations around the world, from electronics manufacturers to clothing retailers, face more scrutiny for their supply chains, factory processes, sales strategies and other practices. Indeed, 76 percent of CGMA designation holders globally said they now see at least somewhat more focus on reputation risk in their industries and cited three main reasons for the trend: market demand for more transparency; reputational failure at a leading organization or competitor; the rise in social media.
In the U.S., 60 percent of CGMA designation holders surveyed said their organizations often or always consider the financial implications of reputational risk when making decisions. And just more than 2 in 5, or 43 percent, said their organizations have rejected projects that made financial sense because the reputational risks were too great.
“Reputation might not be on the balance sheet, but it is one of the most important assets that companies have,” said James R. Blake, CPA, CGMA, CFO of Morey's Piers in New Jersey. “In an age where reputation can be wrecked at the speed of a Tweet, finance teams increasingly have to understand that reputation lost in an instant can have a long tail in affecting the company’s future. That requires a broader understanding of the business environment so that such risks can be appropriately assessed.”
The AICPA and CIMA conducted the survey from July 9 through July 15, receiving responses from 1,300 CGMA designation holders in in 61 countries. For more information about the survey, please contact Jonathan B. Cox with AICPA media relations at 919.402.4499 or firstname.lastname@example.org.