Finns' trust in corporations is declining – Reputation and Trust Analytics

According to the latest edition of T-Media’s annual Reputation & Trust survey, Kone is the most reputable company in Finland. The other two organizations in the top three are Supercell and Fazer. A comparison of data over several years reveals a downward trend in trust toward companies in Finland.

T-Media, an evidence-based reputation advisory firm, has been analyzing the reputation of companies operating in the Finnish market for more than ten years. A database of over 18,000 organizational assessments, collected over the past four years, indicates a decline in public trust toward large companies active in the market.

The two aspects of reputation that have the greatest impact on trust are accountability and governance —the latter referring to an organization’s transparency and the way it operates.

“In these critical areas, businesses have not been able to improve their operations and strengthen their dialogue with civil society at the same pace as citizens’ expectations have grown,” says Jirimiko Oranen, CEO of T-Media Relations. “The gap between what the general public considers acceptable and how businesses are perceived to behave is widening, which is alarming.”

In a worst-case scenario, a loss of trust could result in a company losing its social license to operate.

“Losing the social license to operate can be fatal. Just imagine a taxi driver losing their driver’s license. It’s hard to do business when the regulatory environment takes away your operating permit,” Oranen says.

“Reputation is an area where many Finnish companies are playing into the hands of their global competitors. For a great many global leaders, reputation is business-critical intellectual property and a key element of competitiveness. A damaged reputation has a negative impact on a company’s ability to generate profit, whereas companies with a good reputation attract talent, secure financing on better terms, earn customer recommendations, and enjoy the support of society,” Oranen concludes.

OP SURGING – NORDEA PLUMMETING

Reputation&Trust 2016 Awards, featuring Frida Johansson of Supercell (left), Max Alfthan of Kone, Leena Majamäki of Fazer, and keynote speaker Leena Mörttinen of the Family Business Network in Finland. Photo: Niko Jekkonen.

In 2016, the most reputable company in Finland was Kone, with Supercell a close second. The iconic Finnish companies Fazer and Fiskars ranked third and fourth.

“The top four show that Finns value clear ownership and a family-oriented approach to business,” says Harri Leinikka, CEO of T-Media. “Consumer cooperatives have also managed to secure spots near the top, with OP Group, Valio, and S-Group ranking fifth through seventh.”

“In the financial sector, however, an interesting trend is emerging. The financial group OP is surging to become the fifth most reputable company in Finland, while Nordea is plummeting to become the fifth most disreputable company in the market,” says Leinikka.

“Typically, the reputation of an industry sector should move in the same direction. For instance, Stora Enso and UPM, which were heavily criticized in the past, have managed to get off the list of companies with a poor reputation. In the financial sector, however, we now see diverging trends.”

“OP has managed to avoid the negative impact of the Panama Papers scandal, and it has benefited from being a Finnish consumer cooperative. Nordea’s decline is of historic proportions in terms of the reputation aspect of governance, specifically regarding openness, transparency, and appropriate conduct.”

The findings are based on the Reputation&Trust survey, conducted in June–July 2016. The survey evaluates companies across eight dimensions of reputation: governance, financial performance, leadership, innovation, dialogue, workplace, responsibility, and products and services. 4,264 Finns participated in this year’s Reputation&Trust survey.

TOP 10 MOST REPUTABLE

		Reputation score	Change from the previous year
1.	Machine	4.22	0.07
2.	Supercell	4.20	0.22
3.	Fazer	3.85	0.03
4.	Fiskars	3.69	New
5.	OP Group	3.65	0.10
6.	Valio	3.59	0.00
7.	S Group	3.57	0.01
8.	Alko	3.52	-0.08
9.	Lidl	3.51	-0.06
10.	Liquid	3.41	0.01

BOTTOM 10: DISREPUTABLE

		Reputation score	Change from the previous year
1.	Talvivaara	1.55	-0.04
2.	Caruna	2.17	New
3.	Post	2.63	-0.02
4.	Nestlé	2.66	-0.03
5.	Microsoft	2.73	-0.17
6.	Nordea	2.74	-0.46
7.	Nokia	2.78	0.00
8.	VR	2.82	-0.12
9.	Shell	2.93	New
10.	Stockmann	2.96	0.02

Further information

Harri Leinikka
CEO, T-Media Oy
040 505 5001
harri.leinikka@reptrust-staging.fi-p.seravo.com

Jirimiko Oranen
CEO, T-Media Relations Oy
040 756 6655
Reputation&Trust jirimiko.oranen@reptrust-staging.fi-p.seravo.comT-Median’s annual Reputation&Trust, Kone holds the top spot as Finland’s most reputable company—Supercell and Fazer made it into the top three. Survey data spanning several years reveals a significant downward trend in the level of trust placed in Finnish companies.

T-Media, which specializes in research-based consulting, has been tracking the reputation trends of companies operating in Finland for over a decade. Data from over 18,000 company evaluations collected over the past four years reveals a downward trend in public trust toward the large companies operating in Finland included in the benchmark.

Among the various aspects of the reputation of companies operating in Finland, there is a significant statistical correlation between corporate responsibility—and, in particular, the openness, transparency, and ethical conduct of companies—and the level of public trust.

– In these critical areas, companies have not been able to improve their operations and social engagement as quickly as Finnish expectations have risen. The gap between public values and corporate practices has widened; this is not just about the recent reputation crises involving Nokia Tyres, Caruna, Nordea, or Volkswagen. The phenomenon can be described as alarming, says Jirimiko Oranen, CEO of T-Media Relations.

At its worst, a decline in public trust can lead to a company or an entire industry losing its social acceptance.

“For a company, losing its social license to operate is like a taxi driver losing his driver’s license. It’s difficult to do business if the regulatory environment revokes your business license,” Oranen notes.

– In successful international organizations, reputation is high on the board’s agenda, and Finnish companies would do well to take this issue seriously as well. Reputation is intangible capital and one of the fundamental factors in competitiveness. A loss of trust and reputation has a negative impact on a company’s ability to generate results. “A company with a good reputation attracts better employees, cheaper capital, customer recommendations, and societal support for its operations,” Oranen commented.

OP GROUP ON THE RISE – NORDEA ON THE DECLINE

Elevator manufacturer Kone claimed the title of Finland’s most reputable company for the second year in a row. Gaming company Supercell came in a close second. Iconic Finnish companies Fazer and Fiskars ranked third and fourth, respectively.

“The top four reflect Finns’ appreciation for personal ownership and the operating practices of family-owned companies,” says Harri Leinikka, CEO of T-Media. Cooperative companies have also succeeded in establishing themselves near the top of the rankings: OP Group, Valio, and S Group are ranked 5th through 7th among reputable companies.

However, a rare shift is taking place in the financial sector: the OP Financial Group has risen to become Finland’s fifth most reputable company, while at the same time Nordea has fallen to fifth place on the list of companies with the worst reputations.

– Typically, the reputation of an entire industry evolves in the same direction. For example, Stora Enso and UPM, which were once heavily criticized, have been removed from the list of companies with a poor reputation. In the financial sector, on the other hand, a mixed picture is emerging, Leinikka notes.

– OP has managed to avoid the negative effects of the Panama Papers scandal, gained momentum from its domestic roots and cooperative model, and demonstrated its ability to innovate by expanding into new sectors. Nordea’s decline in reputation, however, has occurred in the area most critical to building historical trust: openness, transparency, and ethical conduct.

The results are based on Reputation&Trust conducted in June–July 2016, in which companies were evaluated across eight different areas of reputation: governance, finance, leadership, innovation, engagement, workplace, responsibility, and products and services. A total of 4,264 Finns responded to Reputation&Trust this year.

TOP 10 MOST FAMOUS

		Reputation score	Change from the previous year
1.	Machine	4.22	0.07
2.	Supercell	4.20	0.22
3.	Fazer	3.85	0.03
4.	Fiskars	3.69	New
5.	OP Group	3.65	0.10
6.	Valio	3.59	0.00
7.	S Group	3.57	0.01
8.	Alko	3.52	-0.08
9.	Lidl	3.51	-0.06
10.	Liquid	3.41	0.01

THE BOTTOM 10

		Reputation score	Change from the previous year
1.	Talvivaara	1.55	-0.04
2.	Caruna	2.17	New
3.	Post	2.63	-0.02
4.	Nestlé	2.66	-0.03
5.	Microsoft	2.73	-0.17
6.	Nordea	2.74	-0.46
7.	Nokia	2.78	0.00
8.	VR	2.82	-0.12
9.	Shell	2.93	New
10.	Stockmann	2.96	0.02