CorpComms Magazine

Strong and coherent communication of corporate purpose can significantly improve financial performance, according to a study by global PR firm Burson-Marsteller and Swiss business school IMD.

Electronics manufacturer Philips, mobile phone supplier Nokia, cosmetics giant L'Oreal and German chemical company BASF are recognised by stakeholders as some of the most effective communicators of corporate purpose, according to the report.

Industry peers identify domestic goods and food manufacturers Unilever, Nestlé and Danone, insurer Allianz, mobile phone provider Vodafone, and oil giant Shell as communicating their social and business agendas with the greatest success.

John Weeks, professor of leadership and organisational behaviour at the IMD, noted the need for a modern business to appeal to a broad section of society: 'Companies' corporate purpose communications are increasingly focused on satisfying multiple stakeholder groups and not just shareholders.'

Whilst a coherent strategy and mission statement are increasingly perceived as giving a business a competitive edge, associated with up to 17 per cent better financial performance, a modern company can no longer look only to its investors for approval. To build reputation, social responsibility, sustainability, accountability and ethics must also have a place in the boardroom. 

Communicating corporate purpose effectively demands transparency and openness, according to the findings. Companies whose social and environmental claims lack authenticity will only undermine trust in future CSR activities. 'If stakeholders perceive that communication around corporate purpose is no more than window-dressing they are likely to react cynically. Stakeholders today expect a two-way dialogue that involves honesty, transparency and openness. This is key to building trust.'

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