CEOs Carry Twice the Burden of Reputation Recovery

The burden of responsibility for restoring a company's damaged reputation rests squarely on CEO shoulders, according to global communications consultancy Burson-Marsteller's recent CEO reputation study. 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. The study was conducted in August by WirthlinWorldwide among Fortune 1000 executives.

"Because CEOs are so strongly linked to corporate reputations, business influencers expect CEOs to take full responsibility for restoring reputation when tarnished," remarked Patrick Ford, chair of Burson-Marsteller's
Corporate/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 Dr. 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."

Following are additional findings on reputation recovery:

  • 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 (vs. 97 percent in 2003).

  • On average, recovery takes four years (4.01 vs. 3.81 in 2003). Executives now recognize that reputation recovery takes slightly longer than they thought one year ago.

  • Despite ongoing headlines about corporate malfeasance, crises do fade with time. Executives believe that it takes nearly three years (2.65 years) for a crisis to fade in most stakeholders' minds.

  • Corporate crises are part of most top executives' business experience.

The majority of executives (67 percent) report having worked for a company or organization that has undergone a crisis that has appeared in the media.

You may like these other stories...

By Jason Bramwell, Staff Writer CPAs in New Jersey, New York, and Pennsylvania believe economic conditions in the United States will likely be the same one year from now, and while they predict higher business revenues...
By Jason Bramwell Managers in accounting, finance, and IT are cautiously optimistic about their hiring plans for the fourth quarter of 2013, according to a new hiring outlook survey from staffing firm Brilliant. ...
By Jason Bramwell CPA firms in 2012 posted their first respectable increases in revenues since before the start of the recession; however, professional staff turnover last year rose approximately 50 percent across the...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.