SRINATH SRIDHARAN
Corporate advisor and independent director

In a trust-driven economy, India needs a reputation rating system as rigorous and consequential as financial credit ratings

Boards must recognise that communication is not a storytelling function - it is a strategic signal management system

REPUTATION IS OFTEN described as the balance sheet of trust - its assets intangible yet invaluable. In today's corporate climate, reputation is no longer a mere derivative of performance; it has become a fundamental determinant. For companies aspiring to be resilient, global, and credible, reputation must be recognised not as optics, but as vital operating capital. Yet, despite its profound strategic significance, reputation remains insufficiently understood and inconsistently managed within many boardrooms and executive teams.

Too often, reputation is treated as a downstream output, managed by communications teams with limited power and late-stage access. What should be a forward-looking function is frequently relegated to reactive messaging. This structural marginalisation does not stem from malice, but from a dated worldview - one in which communication is seen as style rather than substance, where brand is an embellishment, and narrative is a post- script to operational strategy.

This limited view no longer serves. In fact, it constrains enterprise resilience. Markets are quick to detect reputational inconsistencies. Investors reward companies that demonstrate maturity in public posture, consistency in stakeholder engagement, and credibility under pressure.

This reality is especially consequential for India's fast-evolving corporate sector, where new-age founders, next-generation successors, and ambitious professionals are shaping bold business narratives. A single misstep - on governance, employee treatment, compliance tone, or stakeholder dialogue-can fracture belief in the institution.

Reputation is fundamentally an IOU – a solemn obligation owed to stakeholders that embodies commitment to integrity, consistency, and transparency. Much like a financial IOU, a strong reputation creates a reservoir of trust that can be drawn upon in times of adversity, enabling organisations to navigate challenges with greater resilience and credibility. Conversely, neglecting this implicit debt risks eroding stakeholder confidence, inflicting damage that is difficult to repair. Leaders who appreciate reputation as an IOU understand that it is a strategic asset requiring vigilant stewardship, ongoing investment, and unwavering accountability.

To harness this strategic function, boards must first redefine how they perceive the communications charter. Communications should be integrated with legal, policy, risk, and investor relations - not functioning in isolation. This alignment demands that the function itself evolve, both in structure and in stature.

Herein lies a deeper challenge – one that communication leaders themselves must confront. Many in the function have not done enough to understand the depth, structure, and commercial realities of the businesses they represent. Unlike their peers across the CXO spectrum - finance, operations, risk, or compliance - communications leaders often fall short in business fluency, market insight, and commercial articulation. As a result, they are seldom invited to strategic conversations like business planning, growth modelling, or scenario discussions.

This must change. But the onus lies as much within the function as outside it. Communications leaders must undertake serious introspection. Corporate recognition will not be granted on legacy entitlement or stylistic command. It must be earned through relevance. Relevance comes from investing in commercial literacy, regulatory aware- ness, capital markets understanding, geopolitical context, and sectoral insight.

Boards must recognise that communication, when properly structured, is not a storytelling function - it is a strategic signal management system. It alerts leadership to shifts in sentiment, stakeholder mood, and regulatory interpretation. Boards must ask not only for brand metrics but for scenario maps, narrative cohesion, and stakeholder intelligence. They must move beyond assessing how companies look, and begin to understand how they are being interpreted.

Investors, too, need to broaden their evaluation frameworks. In a data-rich, trust-poor world, narrative discipline matters. Incongruence often points to internal misalignment, and the market penalises perceived instability.

Fortunately, some CEOs are already leading this transition. They no longer view reputation as a derivative of success, but as a condition for it. These leaders integrate communication strategy into core decision-making.

To future-proof India's corporate landscape and secure its stature on the global stage, we need a reputation rating system -one as rigorous and respected as financial credit ratings. Such a framework would transform reputation from a soft sentiment into a measurable asset, encouraging enterprises to treat stakeholder trust as seriously as capital structure.

This system would offer investors, regulators, and the public a clear lens into a company's ethical standing, resilience, and public credibility - factors that often remain hidden behind financial statements. In an age where perception shapes capital, compliance, and continuity, India's businesses must bring the same discipline to reputation that they do to revenue. It's time to make reputation not just visible, but verifiable.

Note: Views expressed in this article are of the Author and do not necessarily represent IICA’s stand.