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The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed without
the express written permission of Reputation Institute. RepTrak® is a registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
RLN Meeting Amsterdam
October 2018
CEO ActivismUnleashing the voice of the CEO
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Macrotrends are Changing CEO Expectations
There is a new era emerging
where reputational issues are
driving political, social,
environmental and economic
change -- giving CEOs
reason to rethink their role.
2
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
New Emerging Need for CEO Activism
The company’s active role in politics and public policy:
• Lobbying• Candidate contributions• Align with political committees and
campaigns funding
Past:“Political Activism”
For business gain
Leaders taking a public stand on political and social issues not just related to the bottom lines:
• Diversity and inclusiveness• Sexual orientation/gender• Immigration• Environment
Present:“CEO Activism”
For business and societal gain
Source: Harvard Business Review 3
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Opportunity to increaseCEO Visibility1
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Conversation About CEO Activism is Rife
Fortune’s CEO Initiative, June 2018 Forbes Global CEO Conference, October 2018
World Economic Forum, January 2018
5
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Rising Demand for CEO Responsibility
Global 2018 CEO Dimension Weights
Source: Global RepTrak®
74.0 74.2
67.8
75.623.6%
31.2%
22.9%
22.3%
Factor Adjusted RegressionN = 10,500
Adj-R² = 0.51
Being responsible by behaving
ethically and caring about both fiscal
and social causes drives almost one
third of a CEO’s reputation.
6
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
New Type of Leader: “CEO With a Conscience”
But what does it mean?
• Balancing profits with a moral and ethical conscience
• Doing what’s right by society and shareholders
• Taking a public position on social and values-based issues that matter to the world and business
7
Society is demanding that companies, both
public and private, serve a social purpose.
To prosper over time, every company must
not only deliver financial performance, but
also show how it makes a positive
contribution to society.
Larry Fink, Chairman and CEO, Blackrock2018 Letter to CEO’s
New Expectations of a CEO
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
But Beware of the “Celebrity CEO” Phenomenon
Celebrity CEOs focus on their
personal brand, desire for populism,
and grooming their personal image
– these types of CEOs focus on
products and innovation – their
rising and falling celebrity status
exposes the company to risk.
8
Source: “Causes and Consequences of CEO Celebrity,”
Hayward, Rindova & Pollock, Strategic Management
Journal, 2004
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
CEO Activism Needs to Align With Corporate Purpose2
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Speaking About Social Activism: Be Careful
Is it something that Apple has a special expertise on?...We should only speak when we have certain knowledge to bring to the subject. And I always ask myself do we have standing? Do we have a right to talk about this issue? And generally speaking…it’s not enough to be a large company to speak out.
Tim Cook Fortune CEO Initiative 2018
10
Speak to Competencies and Purpose
Equal Opportunity
Fostering Creativity
Being Entrepreneurial
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Boldly Unleashing Activism for “Greater Good”
Paul PolmanGlobal CEO RepTrak® Pulse
74.0
74.2
67.8
75.6
75.6
73.2
75.8
79.2 76.7+ 0.7
vs. other CEOs
Source: Global RepTrak®
• Unilever’s Paul Polman has a strong reputation and strong scores across all dimensions
• Driven by a commitment to social responsibility he restructured Unilever as a model of responsible business practices
• Polman has a personal mission to galvanize the company and to be an effective force for good.
“If you don’t bring purpose to business, citizens of the world will ask: why are you around in the first place”
Paul PolmanCEO, Unilever
11
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
But “Good Intentions” Can Go Wrong
• Former CEO Howard Schultz introduced
the #Racetogether initiative in 2015
• Intent was to provoke discussion about race relations in America
• Many thought Starbucks had no right to talk about the subject due to their own corporate structure and racial dynamics
• In 2018, Starbucks faced new racial challenges due to a racially charged incident in a Philadelphia café
• In 2018 Starbucks subsequently conducted racial bias training
12
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
And Environmental Activism Can Back Fire
• BP’s former CEO Tony Hayward took an activist position on sustainability and climate change -- Beyond Petroleum
• The Deepwater Horizon oil spill brought to light the reality of BPs lack of integrity
• BP’s reputation has not recovered since the oil spill and remains weak
13Source: Global RepTrak® , BP Sustainability Review 2009
54.5
2018 Global RepTrak Score for BP
Unkeepable promise
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Social Activism is High Risk: Nike “Takes a Knee”
14Source: Custom Nike Reputation Study
• Nike released a campaign including NFL player Colin Kaepernick – and brought to light the issue of racial inequality
• After the ad was released (Sept 2-4) online sales of Nike gear jumped 31% and Nike’s stock price traded at an all-time high
• But subsequent to the initial lift, Nike’s reputation is in the balance:
― The campaign message is powerful but polarizing
― There has been negative impact #Nikeboycott― Uncertainty as to whether companies should take a
stand social issues― Scores among Millennials is higher than Non-
Millennials -- but it has declined― Strongest reputation among African American
Millennials
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Corporate Social Activism vs. CEO Activism?
15
• Nike’s Colin Kaepernick campaign is an example of corporate social activism rather than CEO activism
• In “taking a knee” on a social /political issue Nike aligning with and activated its brand purpose
• Nike’s CEO, Mark Parker has been in the background but publicly made a statement on ESPN to support the company’s stand
• He has been positively outspoken regarding the results of the Kaepernick campaign as well as “record engagement with the brand”
We feel very good and are very proud of the work we've
been doing," Parker said, speaking on the company's
quarterly earnings call. "We know our messaging is
resonating quite strongly with consumers here in North
America and around the world.
Mark Parker, President, Chairman and CEO, Nike, Inc.
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
CEO Activism Can Drive Reputation Lift and Enhanced Business Results3
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
CEO Shapes Company Reputation
Source: Global RepTrak®
55.0
60.0
65.0
70.0
75.0
80.0
85.0
55.0 60.0 65.0 70.0 75.0 80.0 85.0 90.0 95.0
CE
O R
epu
tati
on
Sco
re
Company Reputation Score Among Respondents Familiar with CEO
R² = 0.65
Association Between CEO Reputation and Corporate Reputation
17
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
CEO Impact on Reputation
• Among respondents familiar with a company CEO there is a reputation lift
+10.5 pts
• A company also benefits from a deeper emotional connection with an enhanced CEO familiarity vs. RT Index (rational) :
+2.0 pts
Significant difference > 1.4
Source: Global RepTrak®
Not Familiar with CEO
Company Reputation Based onFamiliar vs. Not Familiar with CEO
Familiar with CEO
76.0
+10.578.0 67.5
Pulse (familiar with CEO)
78.0 +2.0 76.0
RT Index (familiar with CEO)
18
Emotional Connection vs. Rational Understanding
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
How CEO Activism Generates Reputation Lift
Respondents Familiar with CEO
Respondents Not Familiar with CEO
72.0Citizenship
+ 9.9 points 62.1
73.1Governance
+ 9.6 points 63.5
77.2Leadership
+ 8.1 points 69.1
CEO Reputation Impacts Company Dimensions
Significant difference > 1.4
Source: Global RepTrak®
• CEO activism is linked with societal contribution and
ethical and transparent behavior.
• The highest dimension lifts among those familiar with CEOs are in the key dimensions of
citizenship and governance.
19
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
And Impacts Business Support
Respondents Familiar with CEO
Respondents Not Familiar with CEO
61.1%Purchase Intent+ 17.9% points 43.2%
48.0%Benefit of Doubt+21.0% points 27.0%
58.8%Recommendation+ 21.0% points 37.8%
CEO Reputation Impacts Company Business Support
% are Top 2 Box; respondents who gave a score of 6-7 out of 1-7 and not sure
Source: Global RepTrak®
• CEO activism is linked with positive business support.
• Among those familiar with CEOs the average support lift for purchase intent, benefit of doubt
and recommendation is 20% points.
20
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Panel Discussion on CEO Activism
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed without
the express written permission of Reputation Institute. RepTrak® is a registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
CEO Activism
Should your company unleash the voice of the CEO and take a stand on social issues ?
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed without
the express written permission of Reputation Institute. RepTrak® is a registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Our CEO Activism Expert Panel
Mark BlokCountry Communications Manager
Ikea Group
Herman BettenSenior Director Corporate Communications
DSM
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed without
the express written permission of Reputation Institute. RepTrak® is a registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
Key Questions
• Tell our audience about your role and how does that align with CEO communications?
• What is the back story on your CEO and how have you historically leveraged them – as part
of your reputation management activities?
• What is your position on CEO activism and how does it relate to your company – what
issues do you plan to take a stand on?
• What are some of the key lessons learned in how best to unleash the voice of your CEO?
• What does the future hold for how you plan to leverage your CEO as a potential activist?
The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed without
the express written permission of Reputation Institute. RepTrak® is a registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.
CEO ActivismUnleashing the voice of the CEO
RLN Meeting Amsterdam
October 2018