A CEO’s Reputation Can Make Or Break A Firm – Recommendations to Increase Impact

An article on Investors.com about how much reputational value is locked up in the CEO, caught my attention. In this article

A CEO’s Reputation Can Make Or Break A Firm; 3 Ways To Improve It – Investors.com research is quoted from a worldwide  survey by public-opinion pollster KRC Research and public-relations firm Weber Shandwick.

The resulting report, “The CEO Reputation Premium: Gaining Advantage in the Engagement Era,” says, “Nearly half of a company’s market value is attributable to its CEO.”

The benefits include attracting investors (according to 87% of executives surveyed), positive media attention (83%) and crisis protection (83%).

And a CEO who makes himself look bad hurts his company.

This is well known to crisis experts like myself. Negative CEO behavior often leads to rapid share price decreases and organisational changes.

It is also a trend that in many crises CEO’s are fired by the Board or resign due to public pressure. Turnaround experts always say that the quickest way to change an organisation is to get rid of the CEO.

This is based on the very principle that waterfalls flow top to bottom

As the saying goes. Fishes rot from the Head. On the other hand, Positive leaders set examples and drive strategic direction.

Contrast that with Political Leaders who hang on to their power bases or continue with little regard because they have the majority vote.

The research shows that a CEO’s value varies from nation to nation. Executives surveyed in Indonesia say that a chief executive’s reputation is worth 68% of his company’s market value, but the figure is only 25% in the United Kingdom, while the U.S. comes in at 38%.

So, what are some of the obvious things a CEO can do to up his and the organisation’s reputation.

Speak at industry or trade conferences, the survey found. More than 76% of executives said so.

Be accessible to the Media, the 2nd next most popular recommendations were to be accessible to the news media (71%) and be visible on the company website (68%).

Take Action  on issues.  As the Vietnamse proverb states “Talk does not cook rice”. The survey found that respondents all advised that whatever tactic a CEO takes, the key is to act now.

Shannon Wilkerson, CEO of reputation management firm Reputation Communications, recently told the Wall Street Journal that the most common mistake among CEOs is “to do nothing.” She added, “When that happens, the world creates your profile. … Whatever information third parties publish about you — whether credible or not, whether quality or not — will fill out the top pages of the Google search in your name.”

So some recommendations and takeaways for Reputation Managers:

1. Develop a Speaker Visibility Program for your CEO.

2. Get the CEO to use multiple chanells to engage and communicate with stakeholders.

3. Advise and counsel the CEO about the importance of taking action. As General Patton said: ” The imperfect plan executed now , is better than the perfect plan executed next week. Involve your OD/Organisational Behavior experts in this quest.