CEO Fibs, Sustainability and Tiredness

September 22, 2010

CEO Fibs, Sustainability and Tiredness

 A few interesting reputationally-related items crossed my desk or should I say my network.
First, David Larcker and Antastasia Zakolyukina of Stanford University analyzed 30,000 conference calls between 2003 and 2007 to determine if the Q & A period offered clues to when CEOs are being deceptive. They reviewed financial restatements to determine whether CEOs or CFOs were misleading or being untruthful.  The researchers believe that these top execs know if they are manipulating results and clues can be uncovered in their spontaneous comments in the Q&A session. They based their findings on “deception detection research” — a field I had not heard of!  Who would have known. The findings are relevant to those of us in the communications business since it is all about words. It is hard not to recall former CEO of Enron Jeff Skilling cursing on the phone during an investor call near the end. Cursing is probably another telltale sign. So what are the cues they found in this robustly-researched undertaking?  The Economist summed it up best so will borrow their words: 

“Deceptive bosses, it transpires, tend to make more references to general knowledge (“as you know…”), and refer less to shareholder value (perhaps to minimise the risk of a lawsuit, the authors hypothesise). They also use fewer “non-extreme positive emotion words”. That is, instead of describing something as “good”, they call it “fantastic”. The aim is to “sound more persuasive” while talking horsefeathers. When they are lying, bosses avoid the word “I”, opting instead for the third person. They use fewer “hesitation words”, such as “um” and “er”, suggesting that they may have been coached in their deception.”

Congrats to David Larcker who I met a few years back when I was researching the impact of CEO reputation on corporate reputation. David was at Wharton and he was able to help me demonstrate that it was indeed impactful.

Second, I just browsed a  report that came across my desk from MIT Sloan Management Review on The Business of Sustainability which was conducted by Boston Consulting Group (BCG). It is their first annual study and provides some very interesting results among 1500 global corporate executives. Overall they found that 92% of this executive class believes their companies are addressing sustainability issues now and less than 25% reported that their companies have reduced their commitment during these tough economic times. Reputation-wise, these executives said that the greatest benefit to company sustainability commitment was “improved company or brand image.”  This benefit far exceeded other pluses such as cost savings, competitive advantage, employee satisfaction, etc.

Third, this funny subject line came through on my email at work.  “Why do business executives feel doubtful, even tired?” It just struck a chord with me. I think it describes most people I work with these days….isn’t everyone in business tired? My favorite question to ask people I meet is how many hours do you work on the weekend? I am always trying to place myself on a spectrum of weekends spent working. So far, I have not figured out how people turn it off.

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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

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