Three out of four business leaders believe corporate reputation is substantially driven by internal corporate culture, yet only 5 percent think their organization's culture is strong enough to preclude reputational crisis, according to a recent survey of 100 business leaders and human resources professionals conducted by MWW Group.

These findings reveal a significant gap between executives' perceptions of the importance of a healthy cohesive corporate culture and their willingness to prioritize and tend to the factors that cultivate that kind of culture: strong leadership and effective communications.

According to MWW: “As a result, these executives are putting their organizations at risk of employee discord and dissatisfaction that can lead to long-lasting damage to reputation, as was the case for Goldman Sachs after a letter written by a former employee critical of the firm's internal culture appeared in the New York Times in March. The consequences can be financial, as well: for example, JP Morgan's loss of more than $2 billion in a single trade earlier this month, which many inside the firm blamed on a lack of leadership and internal divisions in the chief investment office.”

A majority of executives count employees among the top two influencing groups that most impact their reputation (in contrast, only 15 percent said the same about consumer media, 5 percent trade media). Yet, only 74 percent believe employees truly buy in to their corporate culture.

"Nearly every week a major company is in the news with a culture related crisis, and this study demonstrates a growing acknowledgement of the connection between internal culture and external reputation," says Carreen Winters, executive vice president, reputation management of MWW Group. "Yet all too often, reputation management programs focus exclusively or predominantly on engaging with external stakeholders.

“Positive, productive cultures don't just happen; they are cultivated and nurtured over time. Communications can be a powerful and effective tool for connecting the dots between internal and external stakeholders, and for creating the kind of culture that serves as the foundation of a bulletproof reputation."

The survey also asked business leaders' reactions to the scathing open resignation letter critical of Goldman Sachs internal culture published in the New York Times. Among the findings:
• 77 percent believed the letter had a negative impact on Goldman Sachs' reputation
• Only 3 percent strongly believed that this was an isolated incident of a single disgruntled employee and not representative of the culture at Goldman Sachs
• 66 percent expect to see more of these situations with other companies in the future