When CVS/Caremark announced that it would forego some $2 billion in sales of tobacco and related products recently, CEO Larry J. Merlo stated that: “We came to the decision that providing health care and selling cigarettes just don’t go together in the same setting.” What he did not say, however, is how that laser-like focus on the company’s strategy also turned reputational risk into an opportunity. CVS is now one of a small group of companies that have realized that their reputation is the most valuable asset they have and that building a stronger reputation by avoiding risks to that reputation can create a significant competitive advantage. Let’s look at how these companies are protecting their reputation and brands while enhancing and realizing strategic value from them.