Brand and Reputation in the Boardroom

10 years, 3 months ago

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Dutch CEOs do not see themselves as the personification of the company. They do, however, accept the role of figurehead, particularly during difficult times. This is one of the conclusions of the research study Brand and Reputation in the Boardroom carried



The relationship between brand and reputation is a fascinating one. The world of communication accommodates brand thinkers and reputation thinkers. Brand managers look upon the corporate brand as the roots and ultimate purpose of the company. What matters is to make the brand promise relevant for all stakeholders.

Reputation managers are more likely to focus on the ‘licence to operate’: without the support of the stakeholders the right of existence and the continuity of the company will be at risk. Continuously living up to the brand promise and a consistent way of expressing this promise have a positive effect on perceptions among the stakeholders. This calls for leadership and a structured approach.

Research design

The hypothesis underlying the study was that there is a correlation between corporate brand characteristics and the personal involvement of the CEO with brand and reputation. The corporate brands of the participating companies were characterized by means of the Brand/Reputation grid by Riezebos (2005).



Results and conclusions

The main conclusion of the study is that the CEO’s leadership style is not always consistent with the characteristics attributed to the corporate brand.

Other factors that play a role are personal experience, industry sector, and brand architecture. The CEO is often tasked with bringing about a shift in market focus and culture; this inevitably has an impact on brand characteristics. A relatively large number of the interviewed CEO’s consider their leadership style to be visionary while they view the corporate culture as process or market driven.

The industry sector appears to be a key factor in the CEO´s role in Brand and Reputation. CEOs in the construction and financial sector were clearly cautious in their positioning, due to the recent loss of trust these business sectors suffered.

Many a CEO appears to be preoccupied with striking the right balance when it comes to their own profile. The term Celebrity CEO, which never really became commonly used in the Netherlands anyway, is now definitely no longer relevant. Successful CEOs are leaders who set out the course behind the scenes with becoming modesty and ensure that the company moves in the right direction. The Dutch CEO does not see himself as the personification of the company but merely as a passerby allowed to play a prominent role for the company during a specific phase.

None of the CEOs doubted the importance of the corporate brand. They recognize the brand as an important intangible asset (difference between market value and book value), but do not see the point of actually measuring its financial value. The CEO does, however, see the relevance of measurements in terms of brand visibility and brand preference.

The CEO’s role focuses on steering the development of the corporate brand as this is directly linked to the vision, mission and core values, all matters which he regards as his responsibility.

Although the interviewees immediately associate the relevance of the corporate brand with customers and consumers, they also indicate the importance of the brand as a catalyst within the organisation. Particularly in international companies, the corporate brand sets a direction and provides consistency. A strong brand induces coherence in the way employees perform and present themselves. Brand compliant behaviour, i.e. living up to the core values and brand values of the company, is increasingly becoming one of the fixed performance indicators for employees, often laid down in companies’ performance appraisal systems.

Without exception, the interviewed CEOs stated that they and they alone are responsible for the reputation of the company. They feel that it is something that they deal with on a daily basis. The interviewees cite customer satisfaction and the company’s brand compliant behaviour as factors having the most important effect on reputation, followed by stakeholder relations and the reputation of the business sector.

The CEOs consider the employees and customers to be the most important stakeholders, followed by shareholders, the labour market and government authorities. This stakeholder orientation is not consistent with the image created, particularly in the media, that in their role, CEOs are mainly focused on shareholders.

Although the CEOs are primarily held accountable for the financial performance of the company and value creation, they are increasingly being given additional, softer, targets. These range from customer and employee satisfaction, the net promoter score and diversity, to their role in their own succession planning. Only in a few cases are reputation and brand defined as performance indicators for CEOs.

Implications and recommendations

CEO’s acknowledge the importance of reputation and communication in successfully effectuating major changes. It is, therefore, in their best interest to familiarize themselves with the latest developments and methods in the areas of corporate branding and reputation management.

Communications Directors should put themselves more in the place of their CEOs, interpret their assignments and understand their leadership styles. Communications professionals will have to speak the language of the Boardroom: objective, based on facts and substantiated with figures. The Communications function must make a measurable contribution to the implementation of major changes and to the organisation’s objectives as a whole. Only then will brand and reputation earn the place they deserve on the Board’s agenda.

 

 


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The Author

Koenraad van Hasselt

Koenraad van Hasselt, Reputation Matters, Corporate Communication & Brand Strategy.

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