Your CEO or your client’s CEO is obviously an essential organizational spokesperson, but international surveys consistently reveal a dilemma about public opinions concerning CEOs. What can we do about this dilemma, which shows CEOs are vital spokespersons, but not trusted? The bottom line: Is your CEO a credible spokesperson?
CEO reputation is important to an organization’s success and is one of its most valuable and competitive assets, according to Weber Shandwick and KRC’s 2015 global online survey, which found that on average 45% of a company’s reputation depended on the reputation of their chief executive officer. Other surveys have come to similar conclusions. For instance, the overall average findings from this survey were consistent with a similar 2003 US survey by Burson-Marsteller, which found up to 45% of a company’s reputation could be attributed to the CEO.
The Weber Shandwick survey found significant benefits that result from positive CEO reputation include attracting investors (87%), positive media attention (83%), and crisis protection (83%). Strong CEO reputation also attracts (77%) and retains (70%) employees. These benefits mean you can work towards a positive answer to the question, “Is your CEO a credible spokesperson?”
On the other hand…
Trust is a person’s expectation that the other party can be relied on, will behave as predicted, and will act fairly. Trust in an organization drives business results – it can make or break an organization, according to Edelman consultants, who have found:
- Stock market performance – Trusted companies perform 5% better than their sector.
- Stock market resilience – During adverse events, trusted companies lose 4.7% less than distrusted companies.
- Investor decisions – Institutional investors claim trust in a company is the key driver when making decisions.
- Media coverage – Trusted companies receive twice the media coverage of distrusted companies.
- Consumer purchase and advocacy – Six out of ten consumers would be among the first to buy from companies they trust, and six in ten would defend a company they trust.
Trusted companies build strong relationships with their stakeholders, earn a license to operate and, if mistakes occur, can rebound from them faster.
The great irony about the CEO personifying their organization is that the wider community doesn’t find CEOs as credible as other influencers, ie, they are trusted less. The 2021 Edelman Trust Barometer survey found less than half (44%) of the 33,000 respondents globally rated CEOs as very or extremely credible. CEOs ranked behind company technical experts (59%), academic experts (59%), and ‘a person like yourself’ (53%). Interestingly, trust in ‘regular employees’ crashed 14% to 40% from 54% in 2020, as in the image below. This is a cause for concern. You need to be able to answer the question, “Is your CEO a credible spokesperson?” in the affirmative.
Why trust matters
Edelman research has determined that four key dimensions drive organizational trust:
- Ability: Is the company competent?
- Integrity: Is the company honest?
- Dependability: Does the company keep its promises?
- Purpose: Does the company have a positive impact on society?
Reputation is an essential but backward-looking concept, an outcome of the past. It involves a judgment that has both rational and emotional components, and direct and indirect experiences. Trust is forward-looking and predictive in nature; it also implies a relationship between an organization and its stakeholders and an element of risk. The more trust there is, the more the risk is accepted, leading to a stronger, more fluid relationship, creating business resilience and performance.That’s why trust is such a powerful KPI.
This leaves the conundrum of the CEO being the key to organizational reputation while often lacking credibility in the wider community.
The low trust in CEOs, clearly apparent in the 2021 Edelman Trust Barometer results, has developed at a time when people around the world have comparatively low trust in key sectors of society. Distrust is being driven by a growing sense of inequity and unfairness in the system. The perception is that institutions increasingly serve the interests of the few over everyone. Government, more than any institution, is seen as least trustworthy. Worth noting that CEOs in general are not trusted, but “My employer CEO is,” as shown in the image below. This happens quite widely – that a general type of role holder is not trusted, while a specific person or position the respondent knows of is trusted. This is a consolation to some extent when confronting the question, “Is your CEO a credible spokesperson?”
Image: Edelman Trust Barometer 2021.
Trust is applicable at the individual, organizational, political and social level. Unfortunately, people around the world are losing their trust in institutions and the individuals associated with institutions. In response to the question: “Please indicate how much you trust that institution to do what is right,” the general population in 28 countries said in their responses to the Edelman Trust Barometer 2021 global survey questions that they didn’t trust any of the four major institutions of government, business, media and NGOs.
Similarly, they didn’t trust the individuals associated with those institutions. Only 44% of respondents said they thought CEOs are credible, and only 41% thought a board of directors would be credible, as shown in the image below:
Image: Edelman Trust Barometer 2021.
David Roberts of Vox says:
Political trust is about trust in the basic institutions of public life. In democracies, that means trust in democracy itself. The causes of political trust are fairly well understood. They include things like economic growth, income equality, rule of law, and citizen participation.
But what causes the things that create political trust? For that, a society needs something deeper; it needs social trust, which Kevin Vallier defines as:
Social trust is trust in strangers – people in our society who we don’t know personally. Social trust can thus be understood broadly is trust that people will abide by social norms – publicly recognized, shared social rules that people expect one another to follow and think that everyone morally ought to follow.
Less formally, social trust is the feeling that we’re all in this together as citizens of a nation and broader society. We’re part of a meaningful common identity; we share basic values and expectations – we are knowable and predictable to one another.
Social trust creates a stable social environment in which people feel secure in their plans and expectations. Without it, nothing — not even the most clever policies — can work.
Implications for communicators
Overall, communicators need to maintain a careful balancing act because the link between the reputation of the organization and the person who heads it is potentially dangerous: its reputational capital may rise and fall in line with the perception of the CEO. The achieving CEOs need to be recognized by key stakeholder groups for their achievements, but communicators should avoid the trap of trying to create a cult of the personality.
Stakeholders want a chief executive who personifies the values of the organization, who can speak up for the organization and the industry to make the company stand out from the crowd. The organization’s qualities are embodied in the CEO, who becomes a corporate brand. But common sense should apply.
Above all, it would seem, as a communicator you should ensure your CEO is perceived as a model of integrity and ethical behavior. Even if people might be ungenerous in their general opinions of CEOs, their opinion of individual CEOs can be much more positive due to diligent work from communicators. Work towards ensuring everyone agrees on a positive response to the question, “Is your CEO a credible spokesperson?”
The CEO’s guide to reputation and engagement
Weber Shandwick consultancy has published a 12-point guide to CEO reputation and engagement:
1. Assess the CEO’s reputational premium. Determine your CEO’s strengths (their equity) and areas where they under-perform relative to peers to determine what to capitalize on and what to improve. Keep in mind that highly regarded top executives are known as being good communicators with clear visions for the company.
2. Develop the CEO’s “equity” statement. This defines what the CEO authentically and distinctively stands for and how that connects to the larger business goals of the company. It might reflect their leadership beliefs, or how they are a change agent within the industry. Without developing a succinct and credible equity statement, it will be difficult to fully leverage the CEO’s reputation and capitalize on visibility opportunities.
3. Identify and develop the CEO’s story on behalf of the company. Once the equity statement has been determined and developed, the CEO’s message or vision can be conveyed in a compelling story that outlines the greater purpose behind the company. Some CEOs may want to visibly share company news, while others may see greater opportunity in making themselves known as an industry expert, a thought leader on a topic of societal importance, or an ambassador to the larger world. Ask hard questions such as whether your CEO is sufficiently communicating how the company is expanding or challenging industry horizons, creating new markets, developing innovative products and services that are bettering society, or creating new knowledge that radically changes what is possible.
4. Be an industry advocate. Industry is a leading driver of corporate reputation today, which means a successful CEO will be an industry champion. Speaking at industry events, holding positions of leadership in industry organizations, and having presence in industry trade publications are opportunities.
5. Leverage senior managers. The CEO’s senior management team influences corporate reputation, too. In developing a CEO’s platform, story, and communications plan, it’s important to consider how other senior executives fit into the picture and can help validate the corporate narrative.
6. Increase media training. Good media relations is one of the most important things a CEO can do to be externally visible. Effectively sharing company news or expertise with the media puts a human face to the corporate story.
7. Carefully evaluate CEO’s stance on public policy. Taking a public position on policy needs to be evaluated carefully. When communicating a position, it needs to be clearly connected to the business interests of customers and communities. CEOs must also be mindful that any public position impacts other stakeholders such as employees.
8. Decide which channel is right for the CEO. Understand which kind of activity is the best channel for communicating the CEO’s message, whether it’s a speaking event, position of leadership outside the company, video, news article, or even a post on a social network.
9. Develop a solid social strategy. Having a social presence allows CEOs to share their stories with a greater audience and experience the reputational benefits that come with being online. Social media participation is higher among well-regarded CEOs, highlighting that there are benefits to being social. To choose the right social platform, minimize risk and control the conversation, have a strategic plan in place that identifies the goals of social participation and the story the CEO intends to deliver.
Social media training also goes a long way to ensure senior leaders understand the importance of being online and knows how to effectively use social tools to their advantage.
10. Keep reputation drivers at the top of your to-do list. Plan communication activities involving stakeholders because marketing and communication have a great deal of influence on company reputation today. Participating in CSR initiatives and applying for awards and rankings can also go a long way in improving corporate reputation. Include reputation drivers and metrics in your leadership dashboard.
11. Bolster CEO reputation among your own employees. How can a CEO improve reputation internally? Build trust by communicating plans for the company to show that the CEO understands the organization’s best interests and is working to do the right thing for the company. Internal reputation can also be improved by acting ethically and communicating the importance of ethical conduct.
12. Don’t view CEO humility as a weakness. It is, in fact, a desirable quality that is associated with a positive reputation and effective communication style.
[In addition, Convey empathy in your CEO’s messages and quotes. In these difficult times of COVID it is vital for the CEO, on behalf of the organization, to convey empathy to employees and external stakeholders, ie in other words, to “put themselves in someone else’s shoes.” A couple of important points from Donovan Roche, writing in the Ragan newsletter of 30 September 2021: Feel what you say, and be honest but reassuring.] With this guidance, you can feel comfortable in answering the question, “Is your CEO a credible spokesperson?”
Another related topic is the extent to which different spokespersons are trusted by the public. You can read about this in my article, “How trusted are different spokespersons?“