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External Perceptions

 

After assessing a company’s human rights record, labor and workplace practices, geographic risk, stakeholder relations, allegations of corruption, pending litigation and industry risk, JMR considers one final factor when assessing a company – external perceptions.  

The manner in which a firm is collectively perceived by citizens in civil society, the business and investment community and among government regulators can have a tremendous impact on the success of the enterprise in the long-term. Is a company viewed positively by consumers and the public at large? Is a company frequently the target of government regulators? Does a company enjoy a positive reputation in the communities in which it operates? Does a company have to spend tremendous resources combating negative public relations generated by advocacy groups? Investors with a long-term investment horizon need to ask these types of questions.

Methodology

Our analytical framework seeks to assess our clients’ portfolio companies to determine if the company has been subject to negative public relations or perceived to be an outlier within its industry from various stakeholder perspectives. In order to make this determination, we will communicate with various non-governmental organizations, unions and employee groups, and trade associations as necessary to determine if a company is effectively managing its external relationships and is successful in generating public good will. Companies that fail to effectively cultivate a positive public image have greater difficulty in producing long-term value for investors.  Evaluative factors in this category include:

  • Public reputation and consumer goodwill
  • Relationship with unions and employees
  • Relationship with non-governmental organizations
  • Public boycotts within the last three years
  • Compliance with U.S. and European sanctions and laws

A review of these factors enables us to indicate how a company is perceived in the public sphere, which in turn gives insight into the company’s promise as candidate for inclusion in your investment portfolio.