Half of Americans have changed their buying habits due to a CEO’s actions, young people believe employees, not customers, are a CEO’s highest priority, and consumers are divided based on age and ethnicity on the role a chief executive should play on social issues.
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Those are among the findings of a new Harris Poll study conducted for The Stagwell Group and MDC Partners on the growing impact a CEO has on corporate reputation.
CEOs are becoming more visible and their actions more directly linked to the success or failure of their companies – from products and services to reputations, the study shows.
- 85% of Americans say the CEO has an oversized impact on the reputation of a company today;
- Ethical standards are the highest-valued CEO quality – ahead of company vision and products and services;
- Humility is undervalued among CEOs today, and
- 72% of older Americans believe there is more risk than reward in CEOs speaking out on social issues, while 56% of younger and 55% of Black Americans say just the opposite.
“We cannot underestimate the intense pressure CEOs are under today and the unprecedented role they have on their company’s reputation,” said Mark Penn, president of The Stagwell Group and CEO of MDC Partners. “CEOs are expected to be business leaders and public figures, yet there is a big divide among consumers on the role they should play in addressing social and political issues. In the end, the CEO that wins in today’s balancing act is the one who starts with the company’s values and who understands where and how to authentically engage.”
As with many things, Americans are divided and disagree on how a CEO should engage with stakeholders and speak out on issues. Older, White Americans and Republicans are clear about focusing on business and staying away from issues:
- 61% of Boomers think it is bad for companies when CEOs become more active in expressing political views;
- 65% of White Americans think that CEOs speaking out puts them in an “unwinnable” situation, bound to alienate and frustrate some stakeholders, and
- 49% of Republicans think CEOs aren’t politicians and should stay out of political issues.
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At the same time, appealing to younger, Black Americans and Democrats requires a different approach:
- 31% of Millennials purchase stock based on whether a company shares their values;
- 41% of Black Americans think it’s better to take a stand on issues than not, even if offends some, and
- 42% of Democrats think CEOs are responsible for expressing the values of their companies, even if that brings alienation or controversy.
When it comes to corporate reputation, nearly every business sector is viewed more favorably today after a year of COVID-19. Pharmaceuticals (62% favorable today versus 32% a year ago) and healthcare (57% favorable today versus 34% a year ago) are enjoying the greatest rise in reputation. Even the traditional reputation laggards – government (39% favorable today versus 25% a year ago) and tobacco (29% favorable today versus 17% a year ago) – are viewed more favorably after COVID.
Tech (66% favorable today versus 75% a year ago) is the only sector to decline after COVID, with the auto industry’s reputation remaining flat (60% favorable today versus 61% a year ago).
“Being a CEO today is like navigating a thunderstorm of different stakeholders and views, yet one truth is constant: Reputation remains the most valuable asset a company has,” said Ray Day, vice chair of The Stagwell Group. “You create a brand, but you earn a reputation. Leading companies take measuring and building reputation very seriously. That’s because businesses with better reputations have a clear price advantage, attract top talent, enjoy greater stability, and they recover faster from reputational harm.”
As reputation grows, corporations are expected to do more, the study also shows. More than two thirds (68%) say the nation needs business leaders now more than ever to help lead the country out of COVID, racial injustice and other inequities. In fact, Americans increasingly view private business as best prepared to lead distribution of the COVID-19 vaccine over the federal or state governments. Also, a third (33%) of Americans think income equality and fair wages are the top social issues CEOs most need to address, followed by misinformation and hate speech (22%), climate change (19%) and diversity (17%).
“CEO reputation today means more than mastery of the marketplace. It’s also about a commitment to serve society,” said John Gerzema, CEO of The Harris Poll. “Americans today trust business more than government and other institutions – by a wide margin. With that comes unprecedented permission from the public for CEOs to help solve some of today’s most complex issues.”
Methodology:
This survey was conducted online within the United States by The Harris Poll Feb. 12-14, 2021 among 1,963 U.S. adults 18+. It builds on The Harris Poll’s annual Reputation Quotient study and weekly COVID tracking of public sentiment.
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