As we progress quickly into the new year, I reflect on what has been another dynamic and interesting year for corporate affairs professionals.
It has been a year of “high uncertainty” on the economic, policy and politics front, both domestically and internationally.
As the global economy becomes increasingly impacted by the intangibles that continue to define companies, a set of very interesting trends have emerged in 2019 that are critically important for CEOs and business leaders to consider as we look ahead.
It’s a new age for reputation, where forces beyond profits matter more than ever. In fact, according to the new Reputation Institute 2020 Global Trends report 70.2% of reputation leaders say that managing the reputation of their company is more important now than it has ever been. The study was based on the responses of more than 200 senior-level reputation leaders representing 18 industries in companies across North America, EMEA, Asia Pacific, and Latin America.
We continue to live in a time of mistrust. Trust is now a rare commodity and the repercussion of this decline in trust yields decreased stakeholder support and impacts a company’s license to operate.
As a nation, Australian’s continue to typically distrust our NGOs, businesses, government and media institutions. The Royal Commission into the Financial Services sector has only amplified this distrust with corporate behaviour playing out daily in the media. Importantly, what will be interesting to watch this year is the role the banks must now continue to play in not just rebuilding, but “earning back the trust they once had and lost”. Against this backdrop of mistrust, the role corporate affairs and marketing departments play within organisations has never been more critical.
CEO Activism is no longer optional. Society demands activism, and CEOs must stand up and deliver. CEO activism aligned with the company’s core competencies and values positively impacts the company’s reputation as well as business support. CEOs of major companies are increasingly taking a public stand on political, social, and values-based issues, and are not just concerned about their financial performance. A good example to reflect on is the role that Alan Joyce, CEO, Qantas Airways played in the Australian Marriage Equality debate.
Purpose is more than just lip service. Increasingly, we are seeing people and customers prepared to stand their ethical ground and they want organisations that they work for, or brands that they purchase from or subscribe to, to do the same. Authenticity is vital and customers are demanding a higher purpose. At a time when the public is looking to identify with a company’s values, standing behind and delivering on your corporate purpose will elevate reputation and drive stronger emotional connection. Companies need to deliver on a corporate brand purpose and embrace cultural values, at an emotional level that transcends the products and services they sell.
The power of influence through word-of-mouth and social media networks continues to create influencers. Ordinary people now yield extraordinary influence and impact on reputation. Market influencers are increasingly becoming leading indicators of reputation – and of what is to come. Take Australian politics, there have been an abundance of challenges for political leadership in Australia in 2019, and in particular, the impact and influence of social media. Most recently, we witnessed Scott Morrison’s handling of an unprecedented bushfire emergency debated on social media platforms.
Equality, diversity and inclusiveness. Companies are being judged so to speak based on the demographic profile (gender, ethnicity, race, etc.) of their workforce. In what is a tight and competitive labour market according to the Reputation Institute, companies need to understand what defines their culture and what makes them an employer of choice – they must create a narrative to romance their story and deliver on it.
Furthermore, a new study from Angela Chitkara finds communicators are increasingly assessing risks associated with corporate diversity and inclusion policies. Her research, entitled World in 2020: Age of Organizational Transparency and Accountability – Doing What We Say Matters, speaks of the shift from a few stakeholders to multiple stakeholders of a company. It found that — in an age of transparency and accountability — the lack of diversity and inclusion policies is no longer considered just an internal company problem but can have a negative impact on business. Chitkara foresees corporate affairs professionals moving into a more strategic counselling role as they will be called upon to assess social risks for brands and corporations as pressure mounts for more disclosures and accountability involving diversity and inclusion. She suggests, what used to be considered non-financial assets are now material risks to brands and companies.
Climate change and risk is a real issue for senior business leaders. Climate change and risk emerged as the top issue at this month’s World Economic Forum Annual Meeting and is now firmly established as an issue for senior business leaders. Ongoing research and debate has continued to influence policy makers and business leaders that the problem of climate change has moved from a far-off priority to a here-and-now risk that demands action. In Australia, the recent bushfires have brought home the reality that this is a topic that requires leadership from the top. Executives and investors at the Forum were concerned about the lack of reliable data on the efforts companies and society are making, not to mention their impact. Greater clarity, leaders suggested, is required in order to speed development of new standards to help markets act more efficiently and reward progress.
People both love and fear Artificial Intelligence. I featured prominently over the past year and was a key focus at the World Economic Forum, where there we long conversations about the misuse of AI and how businesses can mitigate that risk. If used ethically, AI will remove a lot of the ambiguity that so often finds businesses in hot water. AI is taking data and using it to create meaningful output and experiences. It also removes emotion and error from decision making and as this technology evolves, this process will only strengthen. But the questions do remain for corporate affairs professionals… How can we ensure that our roles are as relevant in the future as they are today? And how can we leverage technology to do our jobs and serve our clients better and how do we maintain focus when the future is an unknown? Watch this space.
I certainly cannot remember a time in which there are so many unanswered questions about how the next 12 months will unfold.
What is very clear is that Corporate Affairs Professionals are as relevant today as ever.
The landscape is full of talented minds and the events and trends of 2019 certainly make our roles incredibly interesting in 2020.