Sixty-five percent of corporate chief executives said the burden of maintaining a squeaky clean corporate image rests squarely on their back. Some 14% deflect that responsibility to the corporate board of directors and 12% consider it the responsibility of their communications department, according to the Corporate Reputation Watch survey sponsored by Hill & Knowlton, and Korn/Ferry International.
Under the public microscope, the vast majority (88%) of CEOs agree that a company’s corporate reputation is more important today than it was five years ago. Driving the corporate image externally, with the greatest impact on reputation, according to the respondants are:
- 78% – customers
- 48% – print media
- 44% – financial analysts
- 41% – shareholders
- 33% – industry analysts
- 25% – regulators/government
- 15% – broadcast/media.
This is no passing fad either; 81% believe the recent focus on more stringent corporate governance and board oversight is going to be a permanent fixture in the corporate landscape. Much of this may have to do with the pressure corporate boards are putting on the shoulders of their chief executives to build a solid corporate reputation. In fact, virtually all CEO’s (97%) agreed that boards place at least some weight on a candidate’s ability to protect and enhance the company’s reputation.
Regardless of where the pressure comes from, CEOs are taking steps to help ensure a blemish-free corporate face. Three quarters of those polled said their companies have improved internal controls in response to mounting revelations of corporate wrongdoing, 64% have reviewed auditor and accounting relationships and 55% have revised codes of conduct.
Even though the corporate world’s top brass say it is their responsibility, most are also pulling in other resources. Nearly seven out of 10 (68%) believe that a higher proportion of independent directors will become a long-term outcome of increased corporate governance. Additionally, most CEOs believe boards of directors are doing a good or excellent job in performing an oversight role.
“In today’s hypersensitive environment, including tougher public scrutiny, increased media coverage and multiple shareholder interests, a minor blemish can later have a major impact on a company,” said Paul Reilly, chairman and CEO, Korn/Ferry International, in a statement. “Stewardship of corporate reputation can make a significant difference in share price, talent acquisition and retention, and ultimately on a company’s brand.”
Enhancing the Reputation
Even with a clean public image, chief executives are also looking for ways to boost the corporate reputation for a variety of business objectives such as:
- 73% – recruiting and retaining employees
- 61% – promoting transactions and strategic partnerships
- 56% – increased sales
- 45% – enhancing the stock price
- 36% – helping to withstand the impact of a crisis
- 17% – building support for public policy initiatives.
Eight out of 10 also said corporate social responsibility (CSR) initiatives contribute at least moderately to their companies’ reputation, compared with only three out of 10 who said they contribute a “significant amount.” By implementing such a policy, CEOs said the primary business objectives are:
- 71% – recruiting and retaining employees
- 51% – favorable media coverage
- 40% – promoting transactions and partnerships.
Weighting CSRs heavier were European CEOs, where 94% believe these policies contribute at least moderately to reputation.
The survey was conducted by ORC International in August and September 2003 and is composed of 257 completed surveys. To view the results of the Corporate Reputation Watch survey, go to www.corporatereputationwatch.com .