Ipsos Corporate Reputation

is society so polarised at the moment that companies need to pick a side in order to thrive?

In our last Reputation Council report, we saw that more than half (56%) of members believe that their consumers now expect them to take a stand on socio-political issues. These stances should be firmly rooted in the company’s purpose, values and behaviour.

By contrast, in this wave, seven out of ten Council members say that picking a particular side – in a world that’s increasingly polarised and confrontational – is probably a step too far. To do so, businesses would, in most cases, risk alienating significant proportions of their customers or stakeholders. Even for the one in four members who agree with picking a side, this very much depends on the specific issue at hand.

"That is a very dangerous route to go down… It was a very courageous move for Nike to take a stance in their latest campaign. Most companies do not thrive if they put two fingers up to a significant proportion of their potential customer base."

Is CSR dead?

Reports of CSR’s death have been greatly exaggerated. Better to say that in many Council members’ businesses, it has matured from simple corporate philanthropy into something more integrated, rigorous and genuinely aligned with the company’s purpose.

"So whatever you call it, the actions still need to be there. Where it is moving to is more formality and more measurement and more scrutiny, so you can’t fluff that any longer with a bit of money to a good cause. You need to take it seriously, you need to show progress and, again, you need to do it long-term and aligned to what you do as an organisation. You can’t sugarcoat the issues you might have."

Will consumers ignore poor corporate behaviour as long as they get products that are good and cheap?

Council members recognise that our self-interest will often trump reputational concerns about the company we’re buying from – “people want good stuff and they are willing to put up with a little bad behaviour in order to get that.”

But members also see a growing trend, especially among activist millennials and Gen Z, and driven by ever-more available information, to factor a company’s reputation into their purchase decisions. For these consumers, is good corporate citizenship now a basic hygiene factor, rather than a differentiator?

"We believe that consumers more and more expect certain behaviours from a company and they even want to be able to buy products so that they can contribute to a better society. So the products need to enable them to contribute to a better society. Not all consumers and not everyone, but a growing number of consumers."

Methodology: 154 interviews conducted with Reputation Council members between 25th June and 12th November 2018.

Read more from the Reputation Council...

Read more from the Ipsos Corporate Reputation Team...

The Reputation Council Report 2018: Full Report

Welcome to the latest briefing from the Ipsos Reputation Council.

This – our thirteenth sitting – has been the biggest and most international yet, involving 154 senior communicators from 20 countries.

As Paul Polman, CEO of Unilever, once said: “reputation has a habit of arriving on foot and departing on horseback”. In the past year, a welter of high-profile reputation scandals affecting businesses, their leaders and even whole industry sectors has, once again, focused our minds on the risks and rewards of this powerful but potentially volatile asset.

Some of these scandals have posed a genuine threat to companies’ continued survival or licence to operate. Others have fizzled out. In this edition, we examine how Reputation Council members distinguish between issues which might blow up into a genuine reputation crisis, and others that are just day-to-day turbulence. What indicators or early warning systems can communicators draw on, to help them build resilience?

The technology sector has been wrestling with some unprecedented reputation issues recently. Concerns around privacy, data leaks, advertising practices, AI and automation have come together to create the phenomenon of ‘techlash’. We talk to Council members about the implications for their own businesses and the lessons that communicators can learn from the way in which the technology sector is responding to techlash.

We’re also beginning to see greater scrutiny of the role that CEOs should play in external communications, against a backdrop of issues such as pay ratio reporting, gender inequality, shrinking CEO tenures and the ‘celebrity leader’. In this edition, we explore Council members’ playbook for CEO-led communications, and look at how the CCO can ensure that these communications build, rather than destroy, reputation value.

The opportunities and challenges that come with communicating in a global context is a theme we’ve examined in past editions. In this sitting, we ask Council members how they strike the right balance between global and local messaging and narratives, and how they keep a finger on the pulse of their reputation (or reputations) around the world.

Lastly, we’ve introduced some new, ‘quickfire’ sections, in which we analyse Council members’ views on a number of contentious, topical talking points, such as the death of CSR, the distraction posed by social media, the need to pick a side in a polarising society, and whether consumers will overlook poor corporate behaviour if the price is right

I hope you enjoy this edition of the Reputation Council report. Please do get in touch if you’d like to find out more about any of the issues covered or discuss how they might affect your own business.

Milorad Ajder
Global Service Line Leader
Corporate Reputation
milorad.ajder@ipsos.com

Read more from the Reputation Council...

Read more from the Ipsos Corporate Reputation Team...

Global Perspectives on Sector Reputations

Which industries are facing the greatest reputation challenges at the moment?

NORTH AMERICA

Media: 44%

Tech: 44%

Pharma: 31%

Despite lingering reputational issues still plaguing the financial services sector, the recent assault on media and tech means that these two industries are seen to be facing the greatest reputational challenges in North America. Each of these industries is named by 44% of Council members.

Beyond these two industries, pharmaceuticals now holds the third position in terms of reputational challenges at 31%. Cost and value continue to drive the conversation, and with the US government putting more of a spotlight on drug costs, these reputational challenges are likely to continue.

"[Media has] got a constant drumbeat of ‘fake news’, how do you overcome that?"
"These are self-inflicted wounds [in the tech industry] – companies are not thinking through the implications of their actions on their customers."
LATIN AMERICA

Construction: 50%

Energy: 41%

Mining: 34%

In Latin America, construction rises to the top as the industry facing the greatest reputational challenges this year (50%). A number of corruption charges have embroiled not only specific companies throughout the region but also politicians and civil servants.

Energy (41%) and mining (34%) round out the top three most challenged industries, predominantly due to environmental concerns and a perception that they bring limited benefits to the local markets.

"There is a public perception that mining pollutes, does not produce profits for the country, and is a group of companies that do not add local value but add value to those who extract the material and take it away."
EUROPE

Finance: 44%

Energy: 43%

Finance remains one of the industries facing the greatest reputational challenge in Europe (mentioned by 44% of Council members). In the words of one Council member, “this crisis has not been solved yet, given that the image reconstruction process appears to be very slow.”

Additional challenges for the financial services sector include cyber security concerns and emerging FinTech players challenging the traditional financial companies.

Energy also continues to face reputational challenges, cited by 43% of Council members in Europe. Issues continue to focus on environmental concerns, climate change, sustainability and consumer costs.

"When energy companies don’t immediately pass on price savings from a barrel of oil to a consumer or to a client, then the negative repercussions are there immediately."
ASIA PACIFIC

Finance: 88%

Energy: 71%

Media: 71%

Consistent with last year, the financial services industry continues to suffer reputational challenges in APAC, though mentions are higher this year at 88% (up from 73% in the last wave). Council members continue to cite the lingering effects of the financial crisis.

The energy sector is also mentioned more frequently than last year (71%), and while affordability and sustainability are still key reasons, government policy is now referenced far more frequently by Council members.

This year, media is also mentioned by 65% of Council members in APAC, with many attributing this to a changing media landscape as well as the resounding cry of ‘fake news’.

"The energy policy is a mess. Can’t separate from political environment."
"The Trump phenomenon and the constant hammering of ‘fake news’."

In full: how Reputation Council members around the world perceived each sector's reputation

Methodology: 154 interviews conducted with Reputation Council members between 25th June and 12th November 2018. Base: All Reputation Council members – Global (145), North America (16), Europe (80), Latin America (32), APAC (17).

Read more from the Reputation Council...

Read more from the Ipsos Corporate Reputation Team...