(Fortune Magazine) -- Whew, what a year! Last January bankers looked positively sheepish in their new role as federal employees. But by the end of 2009 they had ditched their government bosses and begun swaggering again. During the same period Ford went from the worst loss in its history to the top of U.S. car companies, its stock up more than 300% -- while Toyota began what would become a dramatic fall.
The financial crisis may finally be abating, but after a year of dramatic ups and downs, there's little doubt that corporate reputation matters more than ever before. Perhaps it's no surprise, then, that while entire industries adjust to wrenching changes as the economy starts to stabilize, a ranking of who's admired and who's not would have particular import.
Indeed, our annual comprehensive Most Admired Companies survey this year generated the highest response rate in its history.
But here's something interesting: Despite all the gyrations, turnover on our list this year was just 10%, roughly what it has been for most of the past decade. Seventeen companies have been on the All-Star list since its inception in 2001; more than half of this year's top 50 have been on the list eight of the past 10 years. That rock-solid staying power is a testament to the lasting value these elite companies have created. And it shows how tough it is to make our All-Star list.
What exactly does it mean to be admired? Whether you call it a sterling reputation, integrity, or trust, this aspect of a company's DNA can seem like an imprecise concept in the numbers-driven world of business. But for the companies on the list, trust and integrity are not just vague terms: They're durable assets with a financial payoff. And in 2009 trust took center stage. As Ken Chenault, CEO of American Express (No. 29), puts it, "The competitive advantage of trust has never been more important or more valuable."
So which company does business admire most? Even among this select group there is a clear leader: For the third straight year Apple (AAPL, Fortune 500) takes the No. 1 spot -- this time by the highest margin ever, according to Hay Group, the management consulting firm that collaborates with Fortune on the list. Indeed, in 2009, 51% of corporate leaders surveyed said they admired Apple, an unprecedented majority.
What accounts for Apple's exalted status? One explanation is that it is the company that has single-handedly changed the way we do everything from consume music and access information to design products and engage with the world around us.
Because of its track record, consumers and businesses alike trust Apple's inventions and its ability not only to churn out products that connect with customers but also to introduce a new way of doing things -- to literally show us what's next. Says Norbert Reithofer, CEO of BMW (No. 22): "Apple's customers are more than customers -- they're fans. The whole world held its breath before the iPad was announced. That's brand management at its very best."
Google (GOOG, Fortune 500) comes close to achieving that kind of trust and brand loyalty too -- after all, businesses and consumers trust that Google will tell them exactly what they need to know simply because they ask it to -- so it's fitting that the search giant notched up to claim the No. 2 spot. (It's also fitting, of course, because Google and Apple are increasingly facing off against each other.)
In fact, the number of Internet retail and services firms has tripled as Amazon.com (No. 5) and eBay (No. 40) join the list for the first time, showing another aspect of trust: how comfortable consumers have become with the Internet. We don't give it a second thought when a package shows up on our doorstep from a purchase that we made the night before on Amazon (AMZN, Fortune 500), nor do we worry about buying from complete strangers halfway around the world on eBay (EBAY, Fortune 500). For these companies, as for Apple, consumers' trust has built up trust in their corporate reputations.
Perhaps the most striking examples of corporate trust this year are in the industries that suffered the most. In one of the most tumultuous years in the automobile business, BMW moved sharply up the Most Admired list from No. 28 to No. 22 as it retained the crown as the world's bestselling premium car maker and moved swiftly to meet stricter fuel-economy standards with cars like its smaller 1 Series. Another automobile giant, Volkswagen, has been expanding aggressively in the U.S. and elsewhere and joins the list for the first time this year at No. 50.
It's impossible, of course, to mention corporate reputation in the auto industry without referring to the recall crisis at Toyota (TM). At No. 7, Toyota holds the title of most admired foreign company for the seventh straight year -- but our survey was conducted before the car maker's stunning series of recalls.
Toyota's deep reservoir of respect will be an important asset as the company sorts through its recall mess. Countless pundits have by now weighed in on the company's woes, but a good assessment of what it takes to earn that sort of trust comes from CEO Warren Buffett of Berkshire Hathaway (No. 3), who tells Fortune: "You can't do it in a day or week or month. You do it one grain of sand at a time. And you can destroy it fast, but you build it slowly." For Toyota, next year's survey should be revealing.
In another industry pummeled by the recession, airlines continue to face daunting challenges -- and yet Singapore Airlines managed to impress its peers, moving up from No. 33 to No. 27 and upsetting Continental (CAL, Fortune 500) to take the No. 1 spot in the airline industry rankings.
How did the airline do it? CEO Chew Choon Seng says the company hasn't compromised on what matters: "Even as we scaled back supply to match the impact of the global financial crisis on demand, we made it a point not to touch spending on safety and security, nor on staff training and skills development."
What about the industry that may be the most distrusted of all these days -- financial services? The case of Goldman Sachs (GS, Fortune 500) is illuminating. The bank's reputation among the general public plummeted as it became a poster child for the greed that sparked the financial crisis. But as far as the business world is concerned, its reputation is stronger than ever: Goldman shot up seven slots from No. 15 to No. 8 as it cranked out record profits and nimbly adjusted to the postcrisis world while its peers faltered.
The same is true for J.P. Morgan Chase (JPM, Fortune 500), which inched up from No. 20 to No. 18. The financial services firms that didn't fare so well during the crisis, meanwhile, saw their corporate reputations suffer: Bank of America (BAC, Fortune 500) fell off the list, while Wells Fargo (WFC, Fortune 500) tumbled from No. 14 to No. 39.
For financial firms and others, the next year is likely to bring only more disruption to our All-Star list. Will Toyota make it onto next year's roster? Will the newcomers be back?
As hard as it is to achieve a sterling reputation, it's remarkably easy to lose -- and while the bulk of the financial crisis may be behind us, we're not out of the woods yet. CEOs both on our list and not would do well to follow the counsel of Muhtar Kent of Coca-Cola (No. 10). "People need to know you're out there, that you understand their financial and emotional stress, and that you have a solution for them," he says. "You can't go dark on them, especially in times of crisis." Perhaps the best advice comes from Bob McDonald, CEO of Procter & Gamble (No. 6), who values predictability and consistency above all else. "I often joke, If you call me a boring leader ... that's a compliment."
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