The spate of high profile CEO departures over the past 12 months serves as a reminder of just how integral today’s CEO is to a business’s reputation. Consider the first three months of 2012: we have seen Perpetual, Vodaphone Hutchison and Dexus Property Group all emerge with new CEOs.
The announcement of a new CEO will often move a company’s share price, which further reinforces the importance placed on the CEO by the market. Writing in The Australian Financial Review in 2002, Rochelle Burbury reported on the growing phenomenon of public relations image makeovers for corporates. A decade on and the concept of the CEO as a brand is now widely accepted. Companies seeking to re-position or manage a crisis, recognise the value in having a “bank of reputation goodwill”. Building that bank of goodwill does not happen overnight. Clever corporates have invested through PR strategies over the longer term to develop and enhance their reputation. A company’s reputation is constantly evolving in the eyes of investors and consumers alike. For this reason, it is vital for corporates to regularly visit how they are perceived by stakeholders in order to address issues or weaknesses as they arise. Surveys of how companies are ranked in terms of trust by consumers and investors reinforce the connection between the CEO’s reputation and a company’s brand profile. Consumers buy products or change the way they perceive a company based on the way a company and its CEO have acted. Being seen to act ethically is mandatory. And for investors, company brands determine shareholder loyalty. Similarly, CEOs tend to personify the values associated with a company’s reputation. Apart from improving financial performance, the most important way a CEO can improve their company’s reputation is to improve customer satisfaction and communication. And the role that an effective PR strategy can play in improving corporate communication can not be over-estimated. Article by John Hamer, Shed Media