As sales and stock prices sink, companies are shifting away from using them as the only measures of corporate reputation. In this environment few firms would want to be described by their share price or sales. Even if they are examined under the broader metric of Performance, they’re still just one facet of broad reputation picture. There are other aspects of the reputation puzzle, including a firm’s products and services, its innovation, workplace, governance and leadership. Each of these contribute to the perceptions, beliefs, admiration and trust required to create a strong reputation.

Unfortunately, they don’t always move in unison, and different stakeholder groups may focus on very different things, as Northern Trust experienced last week. When it sponsored a golf outing and Sheryl Crow concert, the firm was focusing on creating a very positive experience for its customers, one that would no doubt ensure their loyalty for years to come and would enhance the reputation of their product and service offerings. In years past it wouldn’t have raised an eyebrow, and its shareholders would have considered the events a normal part of Northern’s cost of sales. Employees who attended the event no doubt felt much the same way its customers did.

However, because they received TARP funds last fall, the firm has a much broader group of stakeholders than its customers and shareholders. U.S. taxpayers are now very interested in the firm’s activities and, perhaps most importantly, its governance practices. The groundswell of negative sentiment had an overwhelming impact on the firm’s reputation, which dropped sharply points over the three day period after the story broke.

Should Northern Trust have focused on the opinions of these people? Many of the commentators expressing concern about the issue may never have heard of Northern Trust before, might never have considered working there, buying a single share of its stock, or opening an account with the bank. But, because they do consider themselves stakeholders, they now feel that this issue has affected them personally, and their influence over others who might have been shareholders, customers and employees may be tremendous. They may start writing to their congressman suggesting stricter repayment of TARP funds or tighter regulation of bank expenses. They may ask their mutual fund companies to sell shares of NTRS from any index funds they hold. And, years later, they may convince someone else who might have been a shareholder, customer or employee of the firm that it’s better to stay away from the bank.

A plug: Our report on “Reputation and Risk in the Banking Sector,” which examines these issues more closely, will be released later this week.