New report highlights CEO value

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Two-thirds of consumers say that their perceptions of CEOs affect their opinions of company reputations according to new research from Weber Shandwick.

Executives, like consumers, also do not overlook the importance of a leader’s reputation, they attribute nearly one-half (49 percent) of a company’s overall reputation to the CEO’s reputation.

Executive leadership is critical to the overall reputation of organisations particularly when it is estimated that a large 60 percent of a company’s market value is attributed to its reputation.

This second installment of Weber Shandwick’s global research, The Company behind the Brand: In Reputation We Trust – CEO Spotlight, explores the importance of executive leadership and communications in helping reverse the declining trust in companies.

The first segment of the study, released in early 2012, reported on the growing interdependence of product brand and corporate reputation.

The findings alerted marketing and communications executives to a major shift in communicating the voice of the “enterprise” to key stakeholders.

The survey among 1,950 consumers and executives in two developed (U.S. and U.K.) and two developing markets (China and Brazil) was conducted by KRC Research in late 2011.

Darren Burns, managing director, China at Weber Shandwick, said: “Consumers today are savvy, well-informed, and privy to a wide variety of purchase options – especially in places like China, where new brands seem to hit the market every day. Their purchasing decisions are no longer made solely on price and product attributes, but also additional factors, like the reputation of the company behind the brand, what the company stands for, and even the character of its senior leaders.”

Nearly three in 10 consumers (28 percent) report that they regularly or frequently talk about company leaders with others.

When consumers are asked what influences their perception of companies, approximately six in 10 (59 percent) say they are influenced by what top leaders communicate.
Corporate leadership communications are important across the globe, but to an even greater extent in emerging markets.

Nearly two-thirds of Chinese consumers (64 percent) and nearly three-quarters of Brazilian consumers (72 percent) rely on executive communications when learning more about a company.

Respect for corporate leaders has been especially bad in developed markets with 72 percent of US and 71 percent of UK consumers have lost respect in the past few years.

In emerging markets, Chinese consumers are evenly split on their changing opinions of corporate leadership (35 percent lost respect vs. 38 percent who increased respect).

Burns added: “Regardless of whether consumers have gained or lost respect for CEOs, the key point is that people are talking about individual corporate leaders – and this impacts purchasing decisions. This may not be entirely surprising in much of Asia, given the importance of hierarchy in local business culture. But with 39 percent of Chinese consumers reporting they ‘often’ have conversations about company leaders, organizations should understand that those at the top are being watched, and they need to set the tone and shape the brand.”

As seen in this research, CEO and company reputation are inextricably linked with corporate reputation not isolated from the public views of a company’s top leadership. 

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