Self-Evaluation and Commitment: Keys to Corporate Reputation
September 13, 2022
This article originally appeared on O’Dwyer’s on September 13, 2022.
It’s largely understood in the corporate world that as issues of social justice, climate action, environmental justice, and human rights move from page 12 to page 1 above the fold, if you haven’t confronted or been impacted by these issues of societal import yet, you’ll soon have to.
After the Black Lives Matter movement exploded on the scene following George Floyd’s tragic death, many companies were caught on the back foot. They had to take immediate action, evaluating their stances on diversity, equity, and inclusion and critically, how they communicated about their successes or shortcomings. It’s now an expectation.
Historically, the reverse has been true. Corporations saying nothing publicly in the face of political, social, or economic upheaval has been acceptable – even expected – but that’s not the world we live in any longer. These were ancillary concerns years ago; today, they’re front and center. It’s not a matter of if you’ll be impacted, but when and those who communicate positively and proactively are those who come out on top in the court of public opinion.
I’m a corporate reputation professional. My job is to ensure my clients put their best foot forward, telling the stories that will elevate leaders and organizational public standing. Believe me – it’s better to be proactive than reactive and the “ostrich approach” to communications isn’t sustainable.
I think that’s broadly understood in the market. Everyone is doing some degree of reputational communications around purpose and social impact challenges. That in and of itself presents an interesting question: When everyone is doing it, how can you distinguish yourself? Ultimately, when everyone is doing perhaps 10% more than the historical baseline, those who do 50% more will stand out, and the public can tell when companies are just checking the box on CSR commitments.
It’s critical to find the balance between compliance and communications
Now more than ever, the worst thing that you can be as a leader is unprepared. If you haven’t done a thorough self-evaluation to determine where and how issues may impact your business, you need to.
If you’re a company that makes batteries for electric vehicles, your environmental record can be equally your greatest ally and most significant risk. Your operations may be beyond reproach, but how green is your supply chain? Are the vendors you work with as committed to getting to net zero as you are? Is someone in your C-suite driving a vehicle that gets 12 miles per gallon? It’s easy to have blind spots but having an honest conversation and shedding light on them will help you understand what a reputational risk might look like before it becomes one.
When you identify a problem internally, how quickly can you get out in front of it? Not every company has a sterling record on the issues that the public considers most pressing and communicating quickly, transparently, and with contrition when appropriate. This isn’t always easy or comfortable, but it separates those who weather the storm from those who fall victim to it.
Compliance is what you do because you must. Commitment is what you share with the world
The Securities and Exchange Commission proposed rules recently that would institute more rigid ESG reporting requirements. Many firms went into retreat mode due to their legal counsel not fully having their arms around the implications or unintended consequences of the SEC’s action. That largely stems from the next-to-impossible task of identifying what they can hang their hats on from a storytelling perspective without opening themselves up to reputational and regulatory risk. It is a struggle. They devote substantial resources to ESG reports, but it’s challenging to move past the compliance stage and turn it into a commitment they can be proud of – and publicize.
You must answer the age-old question: What do our stakeholders want to know?
It isn’t a simple answer in most cases. You’re beholden to multiple stakeholders; investors, customers, employees, government, and more, each with their priorities. As the saying goes, you can’t be all things to everyone. You can tell your unique individual story in the best way you can, highlighting everything that makes your business unique and worthy of attention. Be open and honest about your challenges relative to how far you’ve come and still intend to go. Move beyond compliance and articulate commitment – as long as you’re authentic.
An authentic and thoughtfully communicated mission is the way to win hearts and minds, and convert that sentiment into an economic driver for your business and myriad other benefits. There’s always some degree of risk when you communicate out to the market about the good work that you do, but generally speaking, businesses that put themselves out there in that way are the ones who reap the rewards.
Communications can’t be an afterthought. It has to be a core component of any purpose-based business strategy.