Global business executives assign nearly 60% of the blame to CEOs when companies lose reputation after a crisis strikes, according to a survey by public relations firm Weber Shandwick.
"Interestingly, many of the reasons causing companies to suffer reputation loss are self-inflicted. Financial irregularities, unethical behavior and executive misconduct are all issues that could be prevented if companies had better controls in place," said Weber Shandwick's Chief Reputation Strategist Dr. Leslie Gaines-Ross. "As more reputations deteriorate worldwide, companies need better reputation radar systems to identify and track approaching reputation threats — 33% of the Global Fortune 500 experienced reputation deterioration in their 'most admired' status in 2005."
Weber Shandwick's Safeguarding Reputation survey also identified the key triggers of reputation failure that if caught early could reduce the chances and extent of CEO blame. A majority of executives surveyed cite major triggers of reputation failure as financial irregularity (72%), unethical behavior (68%) and executive misconduct (64%).
Other frequently mentioned strikes against reputation revealed by the survey are security breaches (62%), environmental violations (60%), and health and safety product recalls (60%).
Approximately one-third of survey respondents place CEO compensation, online attacks or rumors and top executive departures low on the list of triggers that tarnish reputations. Companies continue to overlook how damaging threats from online activists and pressure groups can be if they are not prepared to respond quickly and decisively. The survey also underscores how executives around the world might be underestimating the negative impact of executive turnover.
Overall, European executives appear more sensitive to reputation threats than their North American and Asian executive peers. Regardless of region, executives consider financial wrongdoing and unethical behavior the most significant threats to reputation. Compared to their counterparts in other regions, however, North American executives are more sensitive to environmental issues, Europeans to health and safety product recalls and regulatory non-compliance, and Asians to factory breakdowns or explosions.
Safeguarding Reputation was conducted by Weber Shandwick in partnership with KRC Research among 950 global business executives in 11 countries spanning North America, Europe and Asia.
