Reputation capital: The new currency of business

In August 2022, a single controversy wiped billions off the value of one of the country's most recognizable brands.

- RON JABAL

It wasn't a financial scandal or an operational failure. It was a reputation crisis.

A viral video, angry social media users, and a flurry of headlines questioning the brand's integrity created a perfect storm.

Within days, stock prices dipped, customers swore off its products, and lawmakers demanded investigations.

The lesson? Reputation can unravel faster than any balance sheet.

This is why I argue that we need to start thinking of reputation not as a mere PR concern but as a form of capital: one as critical as financial, human, or intellectual capital.

I call this Reputation capital: the accumulated trust, goodwill, and credibility that allow organizations to survive crises, outperform competitors, and thrive in complex environments.

In academia, reputation has been framed as an intangible asset that reduces transaction costs (Fombrun, 1996), builds competitive advantage (Barney, 1991), and enhances organizational legitimacy (Suchman, 1995). It is linked to social capital theory, where trust and networks provide organizations with resilience and access to resources (Nahapiet & Ghoshal, 1998).

But history offers sharper lessons that reputation functions like capital, not just image.

In the aviation industry, a video showing a passenger being forcibly removed from an overbooked flight went viral worldwide. Within two days, the airline lost more than a billion dollars in market value as investors panicked, regulators intervened, and customers threatened boycotts.

What began as a single incident instantly translated into lost financial capital: proof that reputation carries measurable economic weight.