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Becoming more attractive to investors

A smart company builds a positive reputation by maintaining good relationships with all of its stakeholders and creating platforms for profitable development of markets and customers.

Increasingly, investors judge a company by its social and environmental responsibility. A good reputation helps a company both become, and remain, an investment of choice.

Age diversity sends two important messages to investors: a company is rising to the challenge of an ageing population, while recognising that discrimination is morally wrong and bad for business.

Evidence suggests that investors are willing to pay more for companies with a higher reputation.

• There is a relative premium paid for firms with stronger reputations for social responsibility, after controlling for financial performance.*

A good reputation helps a business attract and retain customers. It enhances its ability to obtain lower-cost capital and creates a price premium for the company's shares.

The power of ethical business practice to build corporate reputation is demonstrated by the recent launch of the FTSE4Good index. This is described as: 'an index for socially responsible investment designed by FTSE, one of the world's leading global index providers. FTSE4Good is a series of benchmark and tradable indices facilitating investment in companies with good records of corporate social responsibility.' **

A business will benefit from publicising its reputation as a fair employer and by ensuring, for example, that all corporate literature contains reference to its positive policies on age and that age is included in its equal opportunities statement. See the Co-operative Bank case study.

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