Despite the FTSE reaching new peak levels, it's important to remember that this marks only halfway through the race.

In the dynamic world of business, reputation has evolved from a mere vanity metric to a formidable asset that can be invested in. This transformation is highlighted in the 2025 UK Reputation Valuation Report, which shows that reputation now contributes significantly to a company's market value.

According to the report, long-term value potential, product and service quality, and management credibility are the top contributors to a company's reputation. The impact of Environmental, Social, and Governance (ESG) factors on a company's reputation has also rebounded, with ESG's reputation impact now standing at 10.8%. This suggests that substance is now valued over slogans.

Companies such as RELX, Rolls-Royce, and ITV have demonstrated the ability to drive tangible shareholder value by rebuilding their reputation in just 12 months. In fact, £730bn of market value across the FTSE 350 is now tied directly to corporate reputation.

However, the FTSE 100, which is more exposed to global events, trade tensions, and geopolitical friction, is experiencing reputational strain at the top. In contrast, the FTSE 250, more focused on domestic matters, has proven to be reputationally steadier.

Sandra Macleod, the group CEO of Echo Research, emphasizes the importance of understanding a company's reputation profile, which is unique, much like a thumbprint. She encourages businesses to ask, "What's your reputation contribution?" and consider, "What can you do about your reputation?"

The smartest leaders are not only observing the FTSE rise but also determining what portion of their own valuation is tied to reputation and how they can grow it. Reputational margin, a silent compounding asset, determines a company's success or failure in the long run.

It's interesting to note that in the preceding years, 2023 and 2024, reputation was driven by factors such as brand awareness, trustworthiness, and relevance, especially in digital contexts like Google ranking where recognized brands rank higher. The evolving role of social media as a news source, ethical value sharing, and fair compensation for creators were also key drivers of reputation during this period.

As we move forward, the real race is in the reputational margin, the silent compounding asset that determines a company's success or failure. It's time for businesses to strategize and invest in their reputation to secure a competitive edge in the market.