In May 2017, SenateSHJ surveyed 146 business and public sector leaders across Australia and New Zealand to better understand their attitudes towards reputation and risk.
Today we are pleased to share the findings of Reputation Reality: trans-Tasman perspectives on reputation and risk. This is the second trans-Tasman survey undertaken with Catalyst Research and builds on three previous surveys undertaken by SenateSHJ in New Zealand. Below are some of the top-line findings.
Please contact SenateSHJ to organise a full briefing and discussion of findings.
Executives face crisis of confidence as corporate risks climb
Organisations are experiencing greater risks to their reputation than ever before, and senior executives believe reputation is now more important to manage than it has been in the past.
- Ninety-eight per cent of respondents told us corporate reputation is one of their organisation’s primary assets, up from 96 per cent in last year's study.
- Over half of executives surveyed reported that reputation is now harder to manage than any other risks.
- Risks to their reputation have grown significantly over the last three years, with almost 75 per cent of executives surveyed having witnessed an increase in risks affecting reputation.
Business leaders see reputation as a key component of their success. However, we’re also seeing a ‘crisis of confidence’ in managing it.
Despite business leaders regarding reputation as a primary asset, and almost 90 per cent of organisations believing they are proactive in protecting their reputation, only one in three surveyed in New Zealand and one in four in Australia have high confidence in their ability to successfully manage their crisis communication plan in the event of a crisis.
The survey highlighted a lack of confidence among business leaders in adequate systems and processes to manage reputational risks or crises.
There has been a major shift in the risk environment, and organisations are working hard to
keep up.
Compounding this lack of confidence in managing reputation, the research highlighted a major shift in the risk environment – in particular, the emergence of newer and somewhat misunderstood risks such as cyber security, data and privacy issues, and media activism and sensationalism. The ‘outrage economy’ and social media are proving to be significant and pressing challenges for organisations.
Key drivers of reputation – integrity.
Given the decreasing trust in organisations and governments the world over, it was interesting to note integrity ranked overwhelmingly as the key driver of reputation across both countries. Although New Zealand organisations placed a much greater weighting on this, at 76 per cent, with Australian organisations at 54 per cent. In contrast, New Zealand organisations placed a much lower weighting on authenticity, at only 18 per cent, as opposed to 37 per cent for Australian organisations.
Social and digital media remain challenging tools for managing reputation.
Tellingly, in Australia, only 40 per cent feel confident in managing social and digital media in the event of a crisis, compared to 85 per cent with managing traditional media. The survey highlighted a similar challenge in New Zealand, with only 41 per cent feeling confident in managing social and digital media, compared to 79 per cent with managing traditional media.
Investment shows intent but many organisations are not 'walking the talk'.
It's clear that business leaders believe their corporate reputation is an extremely valuable asset and are well aware of the increasing risks to reputation. Unfortunately, the research indicates actions are not backing up beliefs. Only 48 per cent of respondents in New Zealand (down from 50 per cent) and 55 per cent in Australia (up from 49 per cent) plan to invest in crisis simulation training (one of the most effective ways to prepare for a crisis), and less than 50 per cent are testing their crisis plans annually.
Who is accountable for an organisation’s reputation?
Across both countries, business leaders agreed the chief executive needs to own the management of corporate reputation, and through our own experience we are seeing chief executives playing a more active role in managing reputation in 2017.
The responses also reflect that responsibility for corporate reputation often rests with more than one role in a business. In this year's study we are also seeing a greater level of active involvement in managing reputation across all functions and from senior executives in organisations, notably the chair, board and head of corporate / public affairs.
Who to trust? Employees and external experts now competing with CEOs as most trusted spokespeople.
Business leaders across all industry sectors in both countries believe the chief executive is the most trusted source by the public in a crisis, however New Zealand respondents gave the chief executive a much lighter weighting, at 39 per cent, compared to their Australian counterparts, at 74 per cent. Both countries rated external experts and the media as sources trusted by the public in a crisis, with the respondents in Australia believing the public are more likely to trust employees than the senior executive team.