DEFINITION of 'Badwill'

The negative effect felt by a company when shareholders and the investment community find out that is has done something that is not in accordance with good business practices. Although typically not expressed in a dollar amount, badwill can play out in the form of decreased revenue, loss of clients or suppliers, loss of market share and federal indictments for any crimes committed.


There are several cases in which badwill caused a severe downturn in company stock, such as Tyco, Adelphia, Martha Stewart, Enron and Worldcom. In each new bull market, we are likely to see the same offenses committed by new people. This phenomenon has caused a rise in "socially conscious" investing, where companies promoting badwill are excluded as a matter of policy.

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  1. What are some high profile cases of companies who failed to be socially responsible?

    Learn about corporate social responsibility. Explore how Enron's lack of corporate responsibility ultimately destroyed the ... Read Answer >>
  2. How does lack of corporate social responsibility hurt a company's bottom line?

    Learn about the perils of a lack of corporate social responsibility. Examine the WorldCom fraud, which led to its bankruptcy ... Read Answer >>
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