Reputation is everything in business. The market’s focus on key factors such as environmental, social and corporate governance (ESG); corporate purpose and responsibility; employer brand; and leadership vision has become razor-sharp. These are just as crucial as a company’s products and services are in determining how that business is perceived.
The responsibility for ensuring that all key stakeholders in a company understand such factors lies with the communications team. This means that the role of in-house comms chief should no longer be a rung below the C-suite. Every serious company of scale needs a chief communications officer who is closely aligned with other business-critical functions, such as ESG, compliance and finance.
What practical steps can a company take, with the help of its comms team, to build the perception that it has a credible purpose and brand?
Start at the top
All business leaders must express a vision and purpose for their brand, along with a set of values and guiding principles. All these then need to be articulated clearly and applied consistently across the enterprise.
The induction process needs to show new recruits what the company expects of them when it comes to upholding the integrity of the brand. The company’s website and social channels must reflect its purpose and vision, so that all external stakeholders – from regulators to investors – understand these too.
Businesses and individuals have come to be judged just as much by the company they keep and the world view they represent as they are by their actions. People are attracted to entities that have demonstrated similar values to the ones they hold dear. Several leading multinationals – including Amazon, McDonald’s and Nestlé – have boosted their reputation, profitability and market cap by focusing on core ESG values. Where the big players lead, the rest follow.
Assessing the risk landscape
Responsibility for delivering this “big-picture management” approach rests with the C-suite, overseen by the board.
Demonstrating clear governance is crucial. Firms that have failed to do this can pay a heavy price – WeWork’s shelved IPO being a spectacular recent example.
Last summer the Business Roundtable, an influential group of blue-chip chief executives in the US, published a “statement of purpose”. The document argued that businesses should be run for the benefit of all stakeholders, including employees, suppliers, customers and wider society. Signed by 181 CEOs, it represented a radical break with the body’s previous policy that firms primarily exist to serve their shareholders.
The debate about the role of business is sometimes simplified as “profit versus purpose’. In reality, the pursuit of profit has never been the only game in town. The growing availability of ESG metrics over the past decade has provided new sources of data that have made the identification and measurement of these non-financial factors possible, thereby increasing the importance of brand reputation and corporate communications.
A reputation department
The defining challenge facing brands this decade will be how to reinvent themselves to demonstrate their ESG credentials.
Achieving this will be key to: attracting investment; recruiting the next generation of talent; engaging with consumers, who will buy the brand as much as they buy the product; and future-proofing the organisation to ensure that it can’t be legislated out of business.
This all places a heavy onus on effective communications at strategic level as a core part of the C-suite armoury. If the 2010s were the decade of the compliance officer, the 2020s will be the decade of the communicator.
Chief communications, brand and even marketing officers are increasingly joining corporate boards. Businesses structured this way will have an advantage over those that aren’t. The question for those that have yet to create a chief communications officer role is: can you afford not to?