Two-thirds (66 percent) of consumers say that their perceptions of CEOs affect their opinions of company reputations. And executives also focus on 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, according to the second installment of Weber Shandwick's global research, The Company Behind the Brand: In Reputation We Trust.
Weber Shandwick says that based on its research, executive leadership is critical to burnishing the overall reputation of organizations today, particularly when it is estimated that a significant 60 percent of a company's market value is attributed to its reputation.
The research explores the importance of executive leadership and communications to helping reverse the tides of waning trust in companies. The first segment of the study, released in early 2012, reported on the growing interdependence of product brand and corporate reputation in this new see-through, nowhere-to-hide global marketplace.
"Gone are the days when purchases were made solely on product attributes,” says Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick. “Today's consumer is savvy, well-informed and privy to a plethora of purchase options. Decisions are now increasingly based on additional factors such as the company behind the brand, what the company stands for and even the standing 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.
"In an increasingly seamless world, more consumers are exposed and attuned to corporate actions than ever before,” says Micho Spring, Weber Shandwick's global corporate practice chair. “CEOs can't assume that what they say and their teams do are going unnoticed by the public. Corporate communications from the top must set the tone and shape the brand."
Respect for corporate leaders—CEOs and other corporate leaders—has taken an especially large hit in developed markets: 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). Brazilian consumers are more likely to have increased their respect for top executives than decreased their respect (33 percent vs. 21 percent, respectively).
CEO and company reputation are inextricably linked; corporate reputation is not isolated from the public views of a company's top leadership. Together, company and CEO reputation make a solid contribution to a firm's market value.