What’s Your Corporate Reputation?
Contributing close to $6 trillion to the UK and US stock exchanges combined, according to the latest studies by Reputation Dividend, corporate reputation cannot be taken for granted and left unattended.
As we enter a new year, we consider our hopes, dreams and expectations. To make each day, each chapter ahead count, we need a plan and resolute focus to keep these alive and real. Whether it be for our personal health and fitness levels, higher purpose or social engagements, the same is true in business when it comes to reputation.
Closely tied to trust, reputation is based on performance and expectations. A helpful formula is R (for reputation) = P (for performance) – E (for expectations). The higher the expectations, the greater that performance and effort must be, from being a great place to work to going that extra mile for your customers …
Mindful that it is Reputation for What, among Whom and to What Purpose, it is useful to consider reputation as a dynamic prism, with a range of changing expectations and behaviours across a rainbow of stakeholders and influencers.
Social, geo-political, and economic uncertainties are creating new demands on companies’ reputation assets that are, in turn, ramping up the importance of putting even more effort into identifying the drivers and messaging each reputation needs to succeed. To achieve that corporate focus on reputation what is clear is the need to speak a common language, in compelling business terms that demonstrate how reputations contribute to the organisation’s success along with what needs to be done to protect and enhance it.
CSR On the Rise – For Investors Among Others
Among the many drivers of reputation, Corporate Social Responsibility (CSR) has matured to the point where it can now truly demonstrate its worth. With a gross value exceeding $500bn in the UK and US, a strategic commitment in this area is no longer a ‘nice to have’.
It’s a tangible value, demonstrating courage, vision and purpose that stakeholders are increasingly expecting, and which in turn, properly done, can deliver significant value up and down the chain.
As summed up by the authors of the MultiCapital Scorecard, “If only for the sake of building market value, organisations should take concrete steps to manage and strengthen their reputations, including their sustainability reputations.”
Ability to Attract Talent Takes Centre Stage
Looking ahead, the answer to optimising the impact of individual company reputations lies in delivering the messages that not only play to strengths and resolve weaknesses but most importantly, align with stakeholder expectations. From an economic perspective, as markets evolved since the start of the decade the focus of attention switched from ‘defensive’ characteristics where impressions of ‘quality of leadership‘ and the ‘long-term investment potential’ dominated to ‘growth’ factors like ‘innovation‘ and ‘quality of marketing‘ as the upturn loomed. Now, amid the ‘Trump Bump’ and ‘Brexit Bubble’, ‘risk aversion’ qualities such as ‘ability to attract talent‘ have taken centre stage.
Aligning Your Functional Leaders
In the highly volatile economic environment we’re now in, reputation management has become more complex, suggesting that a more analytical, empirically-based approach is required to navigate the changing landscape. Evidence offers the best protection for the changes ahead and provide the intelligence and accountability needed at board level.
In my experience, there is no better way of delivering a heads-up internally of the importance of reputation than setting a price on its head. It says clearly how much shareholder value flows from what investors believe to be the case about you. It shows how much is in jeopardy if reputation fails. With solid objective evidence, and messages built around the answers, the needle of perception stands the best chance of being moved. Taken alongside other reputational soundings from the organisation’s close stakeholder community, such as employees, customers, suppliers and influencers, Reputation Value Analysis, or the dividend paid by reputation, can help guide greater collective management understanding, attention, investment and effort.
Groups such as the Institute of Directors and the Chartered Institute of Management Accountants have been stepping up their guidance to Boards, as the main steward of corporate reputation, including counselling Boards to:
- Have and review a reputation policy that is cross-functional and reflects different geographies and stakeholders.
- Ensure an integrated approach to reputation and risk assessment
- Include reputation on the risk register
- Monitor and research reputation, including its drivers and consequences on behaviour to better inform strategies and resourcing
- Consider the perspectives of all key stakeholders fundamental to the organisation’s success
- View tough and sensitive discussions through a reputational lens and let it be an added filter for decision making.
As we look ahead, in these increasingly complex times with often challenging stakeholder expectations, you should be well placed for a role of influence and wise counsel, armed with insight to manage, mindfully, your reputation – not just for the new day today, but for all the new tomorrows as well.
CEO, Mindful Reputation
An Expert Witness in Reputation, Sandra is CEO of Mindful Reputation and Director of Reputation Dividend, advising senior leaders and boards, and Ambassador to the International Integrated Reporting Council <IR>, the non-profit group for improving management decision-making and long-term success through broader reporting beyond financials.
Sandra set up the first international franchise for media analysis before launching her own firm, Echo Research, as a full-service global research group with offices in Asia, Europe and the US, which secured over 89 industry awards for innovation and excellence prior to being acquired in 2011.
Founder of the International Association of Measurement & Evaluation Companies (amec) , Sandra has been Trustee and Board Member of the International Business Leaders Forum (IBLF), the Arthur W Page Society and University of Oxford’s Public Affairs Advisory Group. Today she sits on the advisory board of patient advocacy group MK&A in New York, is a Companion of the Chartered Institute of Management and member of the McKinsey Women as Leaders’ Forum. Cited as ‘among the 100 most influential people in PR’, Sandra was also Visiting Professor on Reputation at NYU’s Public Relations and Corporate Communication Masters’ Program.