April 10, 2010

   A few things reputation-related that I wanted to blog about today.
Saw an article in Fortune about what Wall Street analysts think about the importance of CEOs. The survey from DDI found that analysts consider the CEO the only executive worth their time and attention. One of the quotes cited in the brief article went like this, “I don’t spend my time worrying about how companies are fostering their next generation.” Talk about short-termism. [Note: I tried to find the survey so I could cite properly and could not. Neither could I find on Fortune‘s site, possibly because it was a short piece.]

Also took a look at McKinsey Quarterly’s new global survey on sustainability. Definitely worth a read because the information is very rich and noteworthy for those of us interested in how reputation and sustainability work together.  The findings that I found most compelling are:

  • 72% say sustainability is “extremely” or “very important” for managing corporate reputation and brands
  • 55% say that investment in sustainability helps build company reputation
  • 36% believe that reputation-building is a top reason for addressing sustainability

No surprise to me was that NGO pressure was very low on the list as a reason for dealing with sustainability (3%). I used to think that the lack of attention paid to NGOs when this question gets asked demonstrated that executives were fooling themselves for not paying attention to NGOs and trying to engage them.  But now I am starting to think that results like this reflect executives’ unwillingness to admit that NGOs have an effect on their sustainability initiatives. Hard to sort out because I do not see how NGOs could not be a primary reason for pushing companies to see their role in greater issues facing society.

Astonishing as well was that 62% of executives surveyed say their companies do not report sustainability metrics externally to investors or are unaware of how they are used.  When reputation is so important today, why not?  Why not combine financial and non-financial performance into one annual report as Professor Robert Eccles explains in his new book, One Report?

The report also looks at the differences between companies who consider sustainability a top three priority for their CEOs and are effective at managing it . The differences are quite considerable — more “proactive” companies publish sustainability sections on their Web sites, embed sustainability data in their communications with investors, participate in sustainability rankings, issue sustainability reports and communicate with socially responsible investors. My sense is that companies who are more proactive are also more profitable over the long-term.

There is no doubt that the past 18 months of recession have stalled some of the great sustainability initiatives that companies have embarked on to improve the world at large and build reputations. However, I have no doubt that these programs will come back full force with a vengeance in the long-term.

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Leslie Gaines-Ross
Leslie Gaines-Ross

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 corporate and CEO reputations.


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