The need for diversity in the boardroom has been a topic of heavy discussion in recent years. And rightly so.
But one thing is clear. Despite increasing threats to corporate reputation in the form of viral missteps, industry disruptions, and deep fakes, there seem to be very few comms or brand leaders represented on boards. This could be a factor in some of the biggest business blunders we’ve witnessed in recent weeks and months.
Failed IPO attempts, CEO departures, unflattering front page stories all result in companies having to wage massive campaigns to combat attacks and re-win trust.
But what if companies could get in front of these issues to prevent reputational damage, or better yet, build brand loyalty?
The Arthur W. Page Society recently produced a large body of research examining the emerging role of the CCO as a "pacesetter" for companies. In an era where the opportunities to engage with stakeholders are ever expanding, so is the role of the CCO.
The research found that "by focusing on corporate brand stewardship, culture management and societal value creation, today’s CCOs have the best opportunity to influence the full range of corporate character attributes."
I am fortunate to have joined a company with a leadership team and board of directors who think about reputation and brand considerations as they evaluate corporate strategy. However, this may still be more the exception than the rule. The rising role of a CCO hasn’t yet translated into board membership.
Especially in businesses where there is no CCO, boards should seek out this kind of independent counsel to help their companies play better offense and navigate increasingly competitive markets where stakeholder trust and confidence are key differentiators.
During pivotal moments, like raising capital, issuing IPOs or making significant strategic changes, CCOs can help win the confidence of stakeholders by fortifying corporate culture and reputation.
During these moments, any perceived misalignment of who the company is, what it stands for, and what it aspires to be can raise red flags. And, when corporate character comes into question, it puts the entire business at risk.
Often, to quickly stop the damage, high level exits become the crescendo of the story. But having an executive fall on the sword — however deserving — will not create a strong culture, maintain employee morale, or build stakeholder confidence.
Page’s research reminds us that CCOs are often the external face of the corporate brand, jumping into action when the reputation is in danger. CEOs are increasingly leaning on their comms advisors to define and preserve the corporate character before a crisis occurs.
While it’s good to have a strong CCO at the executive table, companies would also benefit from having that expertise inside the board room to ensure reputation is considered when business strategy is evaluated.
The reputation coefficient.
Reputational impacts are often missing during deliberations over strategic pivots. CCOs have more to offer than advice about press releases or media coverage. They need to be tapped before issues become full blown disasters or before an opportunity to position a brand is missed.
Reputational advisors can represent a diverse set of stakeholder voices and can predict their reactions to the moves a company is considering. The corporate character must hold up in every scenario, no matter who an organization is engaging with. And when it does, it can be a powerful multiplier of business efficacy.
Even a rough Glassdoor review can reveal problems with a corporate culture; problems that can spread into the public sphere and create real damage.
Compliance is also affected by corporate culture, and the business impact can be substantial. A recent Gallup article pointed out that companies "experiencing noncompliance problems" lose an average of $14.82 million.
Corporate culture needs to be strong enough to prevent incidents before they happen, and CCOs are increasingly finding themselves as the stewards of culture.
Societal value creation
Societal value can spur corporate activism and/or be a key determinant of a customer’s decision to purchase or a candidate’s decision to accept a job offer.
Customers, partners and — most critically — employees are asking "is this a company I want to work for or do business with?" In 2020, the question will not be "what charities or programs does your company donate to?" It will be "what is your company’s position on XYZ problem, and what are you doing to help solve it?"
As boards continue to look for new ways to protect companies from disruption and transform them into enterprises of the future, my advice would be to invite a CCO to the table who can translate reputation drivers into business outcomes.
In order to drive shareholder value, boards need to ensure every decision they make is accretive to the brands their companies are building. CCOs can deliver three key elements — reputation management, culture stewardship, and societal value creation — they can unlock something new and invaluable for companies and boards.
Jennifer Temple is chief communications officer for Hewlett Packard Enterprise.