The State of Corporate Reputation in 2020 Introduction As global - PowerPoint PPT Presentation

Logos: WS, KRC The State of Corporate Reputation in 2020

Introduction As global business markets head into a new and undoubtedly pivotal decade, business leaders must be prepared for the unpredictable and unknown. Reputational opportunities and threats lie in wait everywhere, internally and externally. The spotlight is more unforgiving as consumers shun companies when they lose trust in them or disagree with them about social issues. The year 2020 marks not just the start of a new decade, but a year in which business leaders all over the globe will need to hone their 20/20 visual acuity and raise their antennae to scan the reputational landscape on a 360-degree basis. Building and protecting reputation must be a daily solve for all companies, large and small. It is in the context of these unprecedented changing times that Weber Shandwick took stock of the reputation of business. The State of Corporate Reputation in 2020: Everything Matters Now examines what drives reputation, why it’s important to be highly regarded and the benefits that come with having a strong reputation. 2

It has been widely accepted that reputation Gail Heimann President & CEO makes a meaningful contribution to Weber Shandwick business success. Our study quantifies the remarkably high value assigned to reputation today and shows how it takes a fierce level of attention to an unprecedented suite of reputation drivers – nearly two dozen deemed significant – to remain highly regarded and prevent reputation erosion. 3

Respondents are in mid- to high-level positions at What we did companies with revenue of at least $500 million in Weber Shandwick, in partnership with KRC Research, conducted an online survey among 2,227 developed markets and executives worldwide in each of the following markets: $250 million in emerging markets. Executives EMEA represent a variety of industries. The survey Spain (100) North America Belgium (100) was fielded July-August Sweden (100) France (100) 2019. Switzerland (100) Germany (100) Canada (102) UAE (102) South Africa (100) United States (105) UK (101) Asia Pacific Indonesia (100) Australia (103) Japan (101) China (101) Singapore (101) Hong Kong SAR (103) South Korea (101) India (101) Latin America Brazil (102) Colombia (102) Mexico (102) 4

What we learned 5

Executives report Strength of company and CEO reputations strong corporate (% global executives) and CEO reputation 1% 1% 87% of global executives say that their company 1% 2% has a strong reputation and 82% believe their 10% 3% chief executives have a strong reputation. 13% Not sure 42% Very weak 44% Somewhat weak Neither strong nor weak Somewhat strong 87% 82% Very strong 45% 38% Company Reputation Company's Top Leader Reputation 6

Reputation has an appreciable impact on market value % market value attributed to company reputation On average, global (on average) executives attribute 63% of their company’s market Global 63% value to their company’s overall Sweden 63% reputation. United Kingdom 47% Germany 62% Canada 55% Executives from Belgium 61% every market report Switzerland 62% France 61% United States 62% Spain 60% high reputational South Korea 63% Japan 58% contributions. China 65% United Arab Emirates 73% Mexico 75% Hong Kong SAR 47% India 69% Colombia 71% Indonesia 73% Singapore 53% Brazil 76% Australia 58% South Africa 67% 7

The CEO plays a major reputational role % company reputation attributed to reputation of top leader (on average) Global executives attribute an average of 58% of their firms’ overall Global 58% reputations to the Sweden 60% leader who runs the United Kingdom 35% company. Germany 59% Canada 45% Belgium 58% Switzerland 53% France 47% United States 49% Spain 48% South Korea 57% Japan 54% China 54% United Arab Emirates 68% Mexico 74% Hong Kong SAR 47% India 65% Colombia 74% Indonesia 75% Singapore 52% Brazil 71% Australia 48% South Africa 61% 8

Reputation is Factors that contribute to company reputation “omnidriven” – it’s (% global executives rate 8-10 on 10-point scale) impacted from all sides Quality of products or services 63% Quality of employees 63% Quality of customer service 61% Safety of products or services 60% Respect for customer or employee privacy 60% A company’s reputation is similarly influenced by a Product or service innovation 59% Industry leadership 59% variety of factors, with no one driver having a greater Financial performance 59% impact than the rest. When asked to rate nearly two Value for the cost or price of products or services 58% dozen different reputation drivers on how much each Ethics and values 58% contributes to their own company’s reputation, global Technological advancement 57% executives assign similar scores to each. All 23 are rated Corporate culture 57% highly by at least half of the global executives in our Corporate purpose 57% study. Quality of CEO or chair 56% Training and support for employees 56% This lack of distinction suggests that Marketing and communications 55% Quality of senior leadership other than CEO or chair companies can no longer solely focus 55% Diversity and inclusion of the workplace 54% on just a few key drivers of reputation Community relations 54% but on many multiple drivers. Governance 53% Environmental responsibility 51% Global presence 50% Philanthropy or charity support 48% 9

Corporate Importance of stakeholder perceptions to company reputation reputation (% global executives rate very/somewhat important) success is dependent 87% Customers upon a large 86% Investors (among publicly held companies) stakeholder set 83% Employees 80% Suppliers and partners Customers, investors and employees are 75% identified by global executives as the most People in the local community important stakeholders when it comes to a company’s reputation. However, all 74% Government officials and regulators stakeholder groups presented in the survey were rated highly, by at least two-thirds. The The media 73% importance of stakeholder primacy in addition to shareholder primacy, as defined by the 68% People on social media Business Roundtable, is evident here. Nonprofits, advocacy groups or non- 66% governmental organisations 10

Reputation is on the Importance of company reputation to board’s agenda Board of Directors (% global executives) 91% of executives say their company’s reputation is 2% important to their board of directors. Only seven per cent say reputation is not important to the board. 7% A company’s reputation matters to more 39% Company does not have a stakeholders than ever before. This research board of directors demonstrates that executives firmly believe Not important that reputation matters to board members. Board members are clearly perceived as Somewhat important 91% proactive partners in reputation management Very Important today. After all, boards of directors have oversight responsibility for mitigating 52% reputation risk and driving business value. MICHO SPRING CHAIR, GLOBAL CORPORATE PRACTICE WEBER SHANDWICK 11

Reputation is How leadership measures/monitors company reputation measured -Top 10 Metrics- (among executives whose CEO/other leaders measure company’s reputation) 71% 1 2 3 Employee satisfaction or Sales and/or financial Surveys among important of global executives say that their engagement 47% performance 45% stakeholder groups* 40% company leadership monitors/measures company’s reputation 4 5 6 7 When asked how reputation gets measured, executives identify five metrics, on average, that their Awards and Online customer ratings Media coverage 34% Personal judgment rankings 37% and reviews 36% of CEO or leadership leadership uses, the most common Online employee ratings team 30% and reviews 34% New customer or client being employee acquisitions 36% satisfaction/engagement, sales/financial performance, and surveys among various stakeholder groups. 8 9 10 Social media or other Government or state Number of website internet metrics 29% support 25% visitors 27% 12 *Such as customers or clients, employees, government, media, industry associations

Reputation is Senior management focus on company’s reputation well tended to by (% global executives) leadership 3% 70% of global executives report that their senior management spends just 18% the right amount of time focusing on their company’s reputation. Not sure Too much Just the right amount 70% Not enough 9% 13

Reputation is communicated to employees and investors 69% of global executives say senior management has mentioned their company’s reputation to employees in the past 12 months and 57% of those who work for publicly held companies report company reputation has been addressed on earnings calls. Senior management mentioned company’s Company reputation mentioned on reputation to employees in past 12 months earnings calls (% global executives) (% global executives who work at publicly held companies) Yes 57% Yes 69% No No Not sure Not sure Company does not 23% hold earnings calls 24% 14% 8% 6% 14