And if you wish to enquire as to what the effects of a negative reputation are... I think it involves prices... I at least had to pay a lot a money after I accidentally killed Diesoon...
But reputation affects prices, not just what you have to pay but what you'll get as well. It'll also affect if you get promoted or not, gaining a reputation level is one of the factors that decide whether you gain rank and rank is a determining factor in who you'll see in the recruit pool. Otherwise the only other thing reputation affects is which ending you get.