CorpComms Magazine

One of the most complex tasks that modern businesses and their leaders face is the management of their reputations. Success or failure hangs on perceptions of quality and integrity. Reputations can take years to build and minutes to lose, with the risk to reputation being heightened by the speed of modern communications in a globalised world. Fortunes can be made and lost overnight as perceptions among people with an interest in the company and their leaders swing between admiration and ridicule. The ability of companies to access financial markets, to sell their products, and to recruit and retain staff, depends critically on how they are perceived amongst customers, employees, investors and a range of other stakeholders. The creation, maintenance and correction of reputations are some of the most important and complex tasks facing senior management today.

Yet despite this, little exists in the way of independent and in-depth research on what makes or breaks corporate reputation. It is hard to find any consensus as to who decides your reputation, whether that differs if you are national or international in scope, whether the company is b2c or b2b, or whether it is listed or private. It is hard to assess how connected each of these stakeholders are - who talks to who? Does what they have to say matter or have impact? And, if so, with who? And can you counter this through direct communication? And finally, can all of this really be measured? What is a good reputation? Does such a thing exist or is it actually a series of viewpoints that depend on where you connect into a company that matters? These are subjects that deserve proper study and analysis.

WHAT PRICE REPUTATION?

Corporate communications practitioners, both in house and external, know all of this only too well. Over the last 15 years, it is clear that communications has graduated from a tactical tool in the marketing arsenal to a strategic discipline of central importance to companies. One of the main reasons for this is the importance that the board and senior management place on their reputation, which is why many communications consultancies are now embracing the terminology of reputation management in their marketing literature.

Companies, for their part, are increasingly creating internal reporting structures that specifically address reputation and its management. Typically these have fallen under the media relations activities undertaken by the communications teams, or more widely under the CSR banner. While there is a lot to applaud in this approach, the fundamental problem with it is that CSR as a discipline therefore falls under the broad ownership of the marketing department. CSR is in danger of being seen as part of what a company would like to project rather than a core part of its corporate DNA. This undermines CSR and, in the long run, it undermines a company's reputation.

It is my view that CSR is now sufficiently devalued as a brand to be in need of a dramatic overhaul. The fact that it reports into the marketing function is the first thing that needs to change. Companies need to understand that their environmental impacts, workplace and customer interactions, sustainability programmes and so on give them a licence to operate in the business environment and are a core influence on corporate reputation.

Unfortunately the CSR report has become a checklist, a corporate ‘must have' piece of literature which it seems is seldom properly reviewed or signed off by anyone at a senior level other than the marketing director. This has to change if companies want to really understand how their reputations are created, sustained, destroyed, and rehabilitated.

It seems also self-evident that reputation needs to be owned by the board rather than the marketing department. It should become a fixed and regular item on every board meeting agenda - a new initiative that some major companies are already adopting. This may seem prescriptive, but it need not be. As a fixed item, all board members should be at liberty to raise any issue - customer, supplier, HR, marketing, legal or other - that they feel will have an impact on the company's reputation. In this highly information rich and interconnected business world, such issues can no longer be dealt with in isolation. Reputational issues are a major factor in the judgment calls that boards are charged with making on behalf of stakeholders.

And finally, the communications function needs to continue to be recognised as the strategic tool it has become. Communications is not only the megaphone through which a company can convey its point or view or business strengths to different audiences. It is also an invaluable source of information on how each of the stakeholders view the company and its competitive position. This feedback, if delivered well and in a way that is accessible to board members, means that companies can detect threats to their reputations earlier, and respond to threats to their reputations quicker. Putting in place formal structures that ensure this is a good place to start. 

Information on the Centre's research and teaching agendas can be found at www.sbs.ox.ac.uk/reputation.  Courses for senior executives commence, by invitation, from summer 2009.

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