Coverage of Corporate Wrongdoing Increased in 06
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Coverage of Corporate Wrongdoing Increased in 06

An increase in news about corporate ethics and wrongdoing helped shape the 2006 Delahaye Index of corporate reputation, with more companies having net negative news for the year as a result.

Paul Holmes

An increase in news about corporate ethics and wrongdoing helped shape the 2006 Delahaye Index of corporate reputation, with more companies having net negative news for the year as a result. News of corporate spying, improper back-dating of stock-options grants and manipulated earnings contributed to a sharp increase in negative news stories during 2006, moving Hewlett-Packard down 28 spots to 40th place, UnitedHealth Group ranked 73rd and mortgage giant Fannie Mae in last place.

According to Delahaye president Mark Weiner, “Just when it appeared that major corporations and the executives who lead them had learned the importance of protecting and advancing their reputations through good behavior, allegations of misconduct have again emerged as a challenge to everything over which corporate leaders are held responsible.”

Delahaye found that the overall coverage improved dramatically for the financial sector during 2006, as media shifted attention away from high-profile negative themes towards stories about corporate advancement and continued economic performance. Reflecting this trend, Citigroup moved up 11 spots to seventh place, while Morgan Stanley advanced ten spots to 12th place and Merrill Lynch & Co.moved up five rungs to 15th.

Although the Katrina hurricane news story played out in 2005, the Index year-end results revealed that the insurance industry continued to receive negative coverage throughout 2006 with fraud allegations and civil suits over policy claims, reflected by State Farm falling 23 spots to 95th place and Allstate moving down 11 spots to 52nd place. 

Stories of declining fiscal health continued to fuel negative news for the automotive industry as Ford Motor Company  was ranked 98th and General Motors took 72nd place.   

The Index also revealed a 30 percent increase in favorable coverage relating to innovative products and services during 2006. Microsoft and Merck & Co. benefited most from this phenomenon. Elevated by news of innovative products such as Vista, strong financial growth and the charitable work of the Bill & Melinda Gates Foundation, Microsoft ranked at the top of the Index for four consecutive quarters in 2006. Driven by coverage of new drugs and vaccines such as Gardasil, a cervical cancer vaccine and Januvia, a diabetes drug recently approved by the FDA and a highly publicized pharmaceutical assistance program for the needy, Merck steadily moved ahead  to end the fourth quarter in tenth place.

2006 Year-End Delahaye Index: Top Ten Companies

1.       Microsoft Corporation
2.       The Walt Disney Company
3.       IBM
4.       Wal-Mart Stores Inc.
5.       Intel Corporation
6.       The Boeing Company
7.       Citigroup
8.       Verizon
9.       Goldman Sachs
10.     Time Warner

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