The burden of responsibility for restoring a company’s damaged reputation rests squarely on CEO shoulders, according to global a CEO reputation study sponsored by international public relations firm Burson-Marsteller and conducted by Wirthlin Worldwide.
When top executives were asked who was responsible for repairing company reputation, executives attributed 68 percent of the responsibility to the CEO and 32 percent to the board of directors.
“Because CEOs are so strongly linked to corporate reputations, business influencers expect CEOs to take full responsibility for restoring reputation when tarnished,” says Patrick Ford, chair of Burson-Marsteller’s corporate and financial practice. “Despite greater board oversight today, CEOs are still held more accountable.”
The survey also asked top executives which strategies are most effective in the reputation recovery process. An apology from the CEO is considered the first step to recovery.
“A CEO apology shows that the company is sincere and takes responsibility,” says Leslie Gaines-Ross, Burson-Marsteller’s chief knowledge & research officer and reputation expert. “Apologies build trust among internal and external stakeholders, demonstrate a company’s willingness to communicate honestly and openly, and acknowledge that a problem exists. CEOs must initiate the first step in the turnaround.”
Although restoring a company’s reputation is a monumental task, it is not impossible. In Burson-Marsteller’s research, 90 percent of executives believe that a company can restore the luster to a tarnished reputation (versus 97 percent in 2003). On average, recovery is expected to take four years (4.01 vs. 3.81 in 2003).