CEO Trust Divide Continues To Haunt Crisis PR Recovery
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CEO Trust Divide Continues To Haunt Crisis PR Recovery

As corporate risks mount, a visible, communicative CEO has never been more important.

Arun Sudhaman

CEO Trust Divide Continues To Haunt Crisis PR Recovery

Every year, it feels like our popular Crisis Review feature becomes both longer and more action-packed, such is the severity of issues and risks that now face businesses, from cybercrime to supply chains to corporate malfeasance.

And yet, even by those standards, 2016 is shaping up to be another banner year for crises, judging by the high-profile scandals that have rocked the likes of Samsung, Mylan, Wells Fargo and Disney, not to mention the ongoing car-crashes represented by the Brexit and Trump movements.

Regaining trust after an external crisis, as many companies have found out the hard way, is one of the toughest challenges in the communications playbook. Indeed, it may be that the playbook itself is past its sell-by date, given the relentless nature of today's threat landscape.

I was reminded of this during a recent Echo Chamber podcast with Eric Hollreiser, VP of corporate communications at PokerStars, who has, in the past five years, been through a remarkable succession of issues, including federal charges, acquisition, sale, an insider trading investigation and — soon after we finished recording — merger talks.

As Hollreiser noted, it is difficult to plan for just one of those events, let alone all. The recovery is not much easier, especially when the most critical component in this process is often overlooked by companies.

As Ipsos MORI's latest Reputation Centre report reveals, "high profile and strong leadership" is the most important factor when it comes to rebounding from a crisis, according to 58% of the 109 communications professionals on the research house's Reputation Council. 

That makes intuitive sense. A crisis is the ultimate test for an organisation and any response should place the CEO and leadership team front and centre.

However, plenty of research also indicates that CEOs are often distrusted, particularly in Western markets. Ipsos MORI notes, for example, that only 23% of the British public trust CEOs to tell the truth, lower than the global average of 39%, and far behind developing economies such as China and India (71% and 69% respectively).

A trusted, visible, CEO can make a critical difference to an organization's crisis response. But how many CEOs are really willing to go out on a limb like this? Edelman's Trust Barometer research reveals that in more than half the countries surveyed, the general public cannot name a single CEO. Accordingly, said Richard Edelman earlier this year in Davos, business leaders must step up if they hope to address concerns over such issues as income inequality, and marry profit and purpose in line with public expectations.

"You have to come out of the bunker — say, here’s who I am, here are my values, here’s why it matters," said Edelman at his Trust Barometer event, recognising that only a handful of CEOs — presumably the likes of Unilever's Paul Polman (pictured) and Starbucks' Howard Schultz — have made this transition.

That much was also made clear from Polman's recent comments to the Arthur Page Society conference in London, where he called on communicators to help shape the world

For communicators, the 'trust divide' that regularly assails their CEOs is a difficult one to bridge. For every Paul Polman there is an Elizabeth Holmes — the Theranos CEO who has been widely criticised (and sanctioned) for her lack of transparency regarding the company's practices.

As Oxfam executive director Winnie Byanyima observed earlier this year, only a few CEOs have the wherewithal to genuinely focus on addressing societal expectations of their behaviour. "That’s not the norm — that’s [Unilever CEO] Paul Polman and a few others. Most business people carry on business as before."

Where does that leave the bulk of the business world's leaders? Scrambling to become better corporate citizens, perhaps, although Byanyima is probably not alone in her scepticism. Perhaps, then, companies should focus on the other factors that Ipsos MORI's Reputation Council consider to be important in terms of crisis recovery: relationships with key stakeholders, and a committed and engaged workforce.

Those are measures which should not be ignored, but neither are as important as a trusted, communicative CEO. Especially in light of another finding from the Ipsos MORI study:  just 17% believe the reputational standing of an organisation prior to a crisis will help it recover. 

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