Ipsos Corporate Reputation

The role of the CEO in external communications

Communicators have to be selective about the frequency and nature of the top executive’s participation, balancing the benefits and risks of bringing a powerful voice into the conversation.

 

Use of the CEO as one of the company’s primary communicators is influenced by industry norms, the nature of the message, and the target audience – with cultural and generational differences in how stakeholders respond to a CEO as an important consideration.
Council members highlight the risk of the CEO’s personality and corporate identity becoming intertwined, as well as the potential to polarise media opinion.
The CEO must be regarded as credible, authentic, empathetic, and transparent if their communications are to have a positive impact. In some cases, other employees may have greater cut-through on a specific issue or with a certain audience.

 

Today, the toolbox of a communications professional is wider and deeper than ever before. From traditional resources such as press releases or spokespeople pertinent to the issue at hand, to newer methods such as social media, blogs or interactive multimedia platforms, the array of options is continually evolving. Within this modern environment, the medium and spokesperson can be as important as the message itself, with the decisions made by corporate communicators playing a crucial role in shaping the image the company is able to create for itself.

Among the decisions facing communicators is the role that the CEO should play in supporting stakeholder engagement. Here, the devil is in the detail.

On the whole, Reputation Council members see the Chief Executive as playing an important communications role. There is a caveat though: the leader is not a communications ‘silver bullet’. Their involvement should be assessed carefully, balancing risk and reward, with consideration given to whether the CEO’s personality and characteristics fit the specific brief.

"EVERY CEO SHOULD BE NAMED THE CHIEF REPUTATION OFFICER FOR HIS OR HER COMPANY."
Balancing risk and reward

In balancing the potential risk and reward of involving the CEO, Council members highlight some key factors to consider.

 

RISK

Overexposure. This could erode the impact of their voice and place unnecessary focus on less important issues.

"If people like me do their jobs well, then the nature of the enterprise should do the heavy lifting when it comes to external perceptions. If it were up to me, I would have the CEO out there three times per year and I hold them in reserve for really big issues or circuit breakers."

Difficulty in distinguishing the person from the company. High-profile CEOs can generate increased scrutiny and pose a challenge when personal views differ from the corporate position.

"It humanises a company, gives it personality and a vision. But the risks are that it becomes too connected with the individual and the personal behaviour impacts the business when they go off the rails, for example, in the case of Tesla."

Personality traits could undermine effectiveness.

"It’s important to speak for the company, but it depends on the CEO’s personality. They need to be comfortable on social media and able to speak on broad topics. The CEO can bring transparency to the company. It’s important to speak on business-critical issues, but there are some cases where the CEO can be too much – sometimes a rank-and-file employee is more authentic."

REWARD

Personification of the company’s values. The CEO is the company’s ambassador, conveying a vision and setting the company’s tone and image.

"We live in a media society that is more strongly personalised than before. If you have a CEO who is an authentic communicator, who is able to excite, then you have the best marketing or PR strategy possible."

A sense of authority. The CEO’s voice emphasises the importance of the message, maximising the chances of engagement.

"It is extremely important for a CEO to act as their company’s figurehead for communication. Nowadays, companies cannot be represented by their brands only: CEOs are required to play a primary role in their companies’ communication efforts because they are the decision-maker ultimately responsible for their companies’ actions."

The face of the company in a major crisis. Instilling confidence, being transparent and outlining short-term and long-term actions.

"I think when the company has an imminent crisis situation, with damages to third parties, the CEO needs to participate and communicate decisions around investments, continuity, etc. that affect stakeholders, be it employees, partners or suppliers."
The portrait of a top communicator

As one might expect, the CEO needs to be a well-rounded leader for him or her to run the organisation successfully. There are, however, useful characteristics to take into account when looking to apply their role to the world of communications. The views of the Reputation Council can be distilled into three guiding principles.

 

Credible and reliable

In order to come across as an authoritative figure in front of key stakeholder groups, competence in the job is essential, as well as a solid track record delivering on the company’s vision. Key audiences need to believe that the person in charge of the organisation is a capable individual who will be in the post beyond the short-term and can take decisive action to steer the company in the right direction.

"Firstly, a master of the brief, so you do need to know the detail, you need to be able to speak credibly to a number of people, know how much things cost, to be able to describe your operations properly, not just in a flippant way. That would be the foundation."

Charismatic, confident and empathetic

Successfully running the business is simply not enough for the CEO to become a valuable asset for the communications function. He or she needs to appeal to and captivate audiences. They need to be relatable but display confidence and a feeling of security both in the tone and content of the message.

"They need to be able to talk about what the business does in a way that engages and connects with people. If they are not good communicators, that will land flat. The role of a CEO has got to change. They have to have more of the softer skills. They need to know about consumers and stakeholders and what makes them tick. They need to be able to engage on issues of concern. But if they have no empathy or no grasp of the issues, the best communications brief in the world won’t help!"

Honest, transparent and authentic

Displaying genuine motivations, with the best intentions at heart, is also vital. The credibility of the message, the CEO themself and the entire company are all at risk if stakeholders do not sense authenticity.

"Truthfulness, transparency, honesty, commitment, passion. But most of all, in the end you express what you are and what a stakeholder expects: a real speech. We are working very hard on this: to have coherence between internal and external discourse, this discourse to be transparent, to not try to hide, seeking to have the greatest transparency and honesty. This is absolutely fundamental."
When the CEO becomes a celebrity

What happens when the CEO is so good at being the figurehead of the company that their name becomes synonymous with that of the organisation? Examples such as Steve Jobs at Apple, Richard Branson at Virgin or Elon Musk at Tesla come to mind. Very often, these are strategic choices made in the early years, where a founder seeks the spotlight to help boost the profile of the company.

Overall, Council members feel that this has proven a successful strategy in the past for many, but it is a tactic that should be carefully thought through.

There is a need to consider not only the profile and abilities of the individual, but also industry dynamics, cultural nuances and generational differences.

"The popularity itself is not bad, but it must be related to the business so that it is a healthy relationship for the company."
"I think celebrity CEOs are a very dangerous game to play. I think celebrity CEOs are a problem here. The tall poppy syndrome [being targeted for criticism due to their success] makes it difficult for a prominent voice to be sustainably successful. I don’t think it is a good model in the current era because this culture is quite oppressive when it comes to success. Less of an issue in the US, where a celebrity CEO still holds some value. I don’t think millennials or Gen Z are particularly interested or respectful of middle-aged men and women who run companies – they are much more interested in brands and movements."

All in all, Council members see some risks if the image of the company and CEO merge into one in the public eye.

In situations where the CEO is an appointed figure who will lead the company for a number of years, rather than the founder and essence of the company, their profile should be moderated accordingly.

"Unless it is your name above the door, unless you are Elon Musk, you need to be very careful that you are the guy who for a period of time is running this organisation and you are a hired hand to do so and at some stage, you will stop being the hired hand and someone else will come in. And as long as all CEOs act like that, they won’t go far wrong, but quite a few don’t act like that."
"Having a celebrity CEO can be helpful but can be a nightmare, especially for the PR department because media will polarise. If they have built this profile around them and they might run their own Twitter account or something, it is very hard to manage the flow of communication and the content of communication. On one hand, that is good for transparency and openness, but on the other hand, he or she might need the time to evaluate information and talk to his or her lieutenants before making comments."

Final thoughts

Call on your CEO, but do so after careful consideration.

A communications strategy is successful when it’s able to deliver a clear and compelling message to the audience it is trying to address.

The company needs to act like a well-coordinated orchestra to deliver a compelling symphony.

The communications professional, as the conductor, can achieve this with a greater array of instruments than ever before. Here, the CEO can play the lead tenor or soprano able to unlock attention and convey the essence of the ensemble in a way no one else can.

However, like the valuable resource that they are, the CEO needs to appear at the right time and in coordination with the rest of the company.

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

Read more from the Reputation Council...

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The AI Paradox: Businesses must not overlook their responsibility to reputation as investment in this technology grows

Digital technologies, from social media to Artificial Intelligence (AI), have undoubtedly altered peoples’ lives – some for the better, some for the worse. We’ve seen the rise of intelligent assistants like Siri and Alexa, grown reliant on communication platforms to keep in touch with friends and family, and have witnessed the positive impact of wearable technology in healthcare.

According to a 2017 PwC report[1], AI technology could deliver a 10% increase in the UK’s GDP by 2030, provided that different types of AI technologies are invested in. To nurture this potential, in early March the government outlined a plan to position the UK as the global leader of artificial intelligence[2]. The plan incorporates investing in R&D, helping people develop skills for the new age of AI, and supporting sectors in boosting their use of AI and data analytics technologies. The hope is to create resilience among the UK’s workforce as the use of AI becomes widespread across sectors and helps boost the economy.

The indication that AI is the future is evident among business leaders too. In a recent study by Ipsos, the authoritative Captains of Industry, three in five stated they have already invested in digital technologies such as machine learning and artificial intelligence. Another third plan to invest in the next five years, as businesses prepare for the utilisation of AI technologies, align with government priorities, and foster the potential for economic growth – especially in a post-pandemic world

However, while the benefits that could be reaped from digital technologies are limitless, it doesn’t come without its challenges. In an Ipsos poll published by the World Economic Forum, four in ten adults across the world said they are worried about the use of artificial intelligence, and nearly half of adults globally agree that the use of AI by companies should be regulated more strictly than it currently is[3]. In another poll, less than one in five adults in the UK believe their job will be automated in the next 10 years, and almost four in five feel confident they already have the skills to carry on with their current employment in the future – contrasting senior leaders’ perspective of digital technologies potential.

While government and businesses are working toward unlocking AI’s potential, efforts will need to be put in place to convince employees of AI’s positive societal impact, the need for upskilling, and the benefits it could bring to jobs in the UK. Uplifting the reputation of AI and automation will need to be at the forefront of the government’s transformational strategy – especially as trust in the sector[4] hit an all-time low in 2020, according to the Edelman Trust Barometer.

Companies such as Microsoft have already taken some steps toward convincing the public in their efforts toward responsible technology by publishing six ethical principles to guide the development and use of artificial intelligence[5], with focus on working closely with employees and teams across the company to enable this effort. The government is also taking steps on this by launching an independent Centre for Data Ethics and Innovation that will advise on the ethical use of data, ranging from evaluating its social and economic impacts through to its fair and responsible application across businesses.

These efforts are a step in the right direction. Digital technologies are notorious for their fast evolution, with policies and regulations coming too late to resolve issues that have already left a negative mark on society and employment. Governments, businesses, and industry experts will need to work coherently and transparently when implementing AI, and work toward foreseeing issues with its implementation before they happen.

Building trust with the public will be key, alongside convincing the UK workforce of the benefits for upskilling, with a focus on fully communicating how utilising digital technologies would affect society and employment, both positively and negatively. Turning the UK into a global AI leader will be a challenging endeavour, but as long as we remember that having the capability to create technology is not all it takes for its success, realising all of its social and economic benefits are very much within our grasp.

Article links

[1] https://www.pwc.co.uk/economic-services/assets/ai-uk-report-v2.pdf

[2] https://www.gov.uk/government/news/new-strategy-to-unleash-the-transformational-power-of-artificial-intelligence

[3] https://www.ipsos.com/en-us/wef-artificial-intelligence-press-release

[4] https://www.linkedin.com/news/story/were-losing-our-trust-in-tech-5042340/

[5] https://www.microsoft.com/en-us/ai/responsible-ai?activetab=pivot1:primaryr6

For more information please contact:

Nadya Valkova
Research Manager, Corporate Reputation

Nadya.Valkova@Ipsos.com

What drives judgement of an organisation’s reputation?

An important focus for Ipsos Corporate Reputation is to help our clients understand what drives their reputation, in other words, what are the issues stakeholders think about when they make judgments about companies and organisations. In this article we will show what are the key aspects organisations should be mindful of according to MPs and business journalists who we regularly interview.

What exactly drives reputation will vary from one organisation to another – there isn’t a single, off-the-shelf answer to this. Feeding into an organisation’s reputation will be elements of what it does (for example, product quality and innovation), what it stands for (such as business acumen, ethics, corporate social responsibility and ESG performance), expectations and perceptions of the sector it’s in, expectations of business and industry, and other wider context issues. Furthermore, an organisation’s delivery against its corporate promise needs to match or exceed the expectations it creates.

There will be many tangible benefits that an organisation gets from building reputation value. It will, for example, help ensure your point of view is heard in policy making and regulation, make stakeholders more receptive to communications, build resilience to draw upon during times of crisis, and strengthen your employer brand.

Factors shaping reputation will vary from company to company, as reputation isn’t formed in a vacuum. It is shaped by perceptions of the sector, by the ongoing socioeconomic climate and policy agenda, as well as the behaviour, performance and communications effectiveness of a company. However, MPs and journalists have told us which issues they tend to consider when they from opinions about companies and organisations, which we’ll discuss here.

The most common consideration for business journalists when judging an organisation tends to be its financial performance. Often, this is seen to be a hygiene factor which an organisation needs before it can start to credibly engage with other issues. As one national business journalist states;

“If you haven't got that [financial performance] you can't do anything else. If you're not a viable business nothing else really matters. You can be as nice as you like to everyone else but if you're going to go bust, there's no point.”

Other common considerations today among business journalists include quality of management, treatment of customers, treatment of employees, and how it engages with journalists.

Journalists tell us that there are three key benefits for an organisation from engaging well with them; it allows journalists to get an organisation’s message across in the pieces they write, it could position an organisation in a more favourable light, and it helps journalist to report more accurately and less one-sided. As a regional business journalist explains;

“You're never going to stop bad headlines if things go badly but engagement on a number of specific issues such as remuneration, climate change, you know if I have a full understanding of a company's policy and why it's doing something, I'm much less likely to shot from the hip. If I have a full understanding of that company's strategy and why something has happened, I'm probably going to have a more holistic, a fuller appreciation of what that is rather than just writing "This is a bloody disaster"”

Indeed, between 2015 and 2017 we saw that engagement with journalists rose in importance as an important factor (see illustration below), and it has maintained its importance ever since. It’s also interesting to note how treatment of employees has become an increasingly important factor for journalists; as Covid-19 lockdown restrictions start to ease and companies announce their plans for their employees (a return to office working or a continuation of remote, flexible or hybrid working), companies need to be mindful of how their demands of employees might be perceived and how this might impact on their reputations.

Meanwhile, the factors that MPs most commonly consider when judging organisations are treatment of employees, track record, financial performance, social responsibility and environmental responsibility.

When asked to rate each aspect in terms of importance, treatment of employees has over time continuously been rated as an important attribute by MPs, while social and environmental responsibility is becoming increasingly important:

However, which aspects are of most importance does to some extent depend on which side of the House an MP sits on.

For Conservative MPs, a company’s track record and financial performance are the key considerations – and financial performance is far more commonly mentioned by Conservative MPs than Labour MPs. As one Conservative Backbencher states;

“Longevity is important, successful track record in either financial terms or stuff they sell or market. The reality is you don't really know about their CSR. The brand reputation is hugely important.”

Meanwhile, the key aspect for Labour MPs is treatment of employees (a far greater consideration among Labour MPs than Conservatives), followed by social responsibility. As one Labour Shadow Minister sates, the way a company treats their employees can be seen to be a reflection of the wider ethos of a company;

“First and foremost, in terms of the management and the whole ethos, the way they treat their employees… how employees are treated is very important to me, are they on proper contracts, are they paid properly, do they have security of employment, do they have things like pensions.”

In line with the views of Labour MPs, our most recent wave of the Reputation Council showed that corporate communicators commonly view employees as a stakeholder group which is increasingly influential on company reputations (legislators, such as MPs, are also seen to be increasingly influential by corporate communicators). Employees are no longer an afterthought for corporate communicators and are increasingly treated “much more seriously as a sophisticated stakeholder audience” and a trusted and credible source of information about a company.

Once organisations understand how key stakeholders form their opinions of them and their competitors, and how they perform against these criteria, they can then put plans in place to target communications more effectively – as well as identifying how (and if) an organisation needs to ‘course correct’ to deliver against stakeholder expectations. In terms of planning a communications strategy, further insight on how best to engage with MPs can be found in our recent post: Creating relevant and engaging comms with MPs for effective corporate planning.

Ipsos MORI can help you better understand what drives opinions about your organisation among various stakeholder groups, and the steps you need to take to bolster the way you are perceived to perform on those key attributes. We provide tailored advice through bespoke research and/or through our syndicated stakeholder surveys among legislators, journalists, business leaders and investors.

Want to know more about our MPs and Business Journalists syndicated surveys (or our wider bespoke surveys)? Get in touch with Ipsos MORI….

For more information please contact:

Guto Hunkin
Associate Director, Corporate Reputation

Guto.Hunkin@Ipsos.com