PR is NOT the Guardian of Corporate Reputation

A guest post by James G.Savage — A few weeks ago Sean posted eloquently on the value of a firms’ reputation. Akin to the accounting concept of goodwill, there is general agreement that reputation and, hence, reputational risk is, in fact, tangible and material. In light of the wreckage of the past few years, stakeholders increasingly assume companies are on top of reputational issues, but in fact most companies still do not have any sort of proactive reputation management strategy, with no holistic approach to building reputation and mitigating risk.

Functionally, who owns corporate reputation? In the risk management world there is a fierce debate going on right now over that very point. Most corporate communicators reading this blog would probably assume PR is front and centre here, as communications is at the intersection of brand, business, stakeholders and reputation.

And they’d be dead wrong.

Reputation management remains at a very nascent stage. Like the parable of the blind men and the elephant, various internal ‘experts’ within the enterprise approach corporate reputation from their specific fields of expertise. Within companies, the C-suite assumes reputation is top-of-mind for all employees, while specific functions – enterprise risk management/GRC (governance, risk and compliance), marketing, communications, operations, product development, corporate sustainability, even IT – equally assume they “own” guardianship of the firm’s reputation. These various parties work diligently in splendid isolation from one another, often falling victim to the critical myths I outlined in an earlier white paper.

The author of KPMG’s authoritative Reputational Risk Survey, Dr. Thomas Kaiser, put it this way in a recent interview with Britain’s Risk Universe magazine:

The role of PR departments is essential for ‘clean-up’ operations following a reputational risk event, but they should not be key in its active management. Reputational risk is not a PR exercise – the underlying problems of any event need to be solved rather than actively managed after the event.

To me, that quotation epitomizes the singular failure of corporate communications to get beyond the tactical and be seen as central for business strategy and corporate reputation. Kaiser adds that “people (in the enterprise) need to define their role in reputation management.

So I’ll put it out there for this blog’s readers. Has PR missed the boat? Are we down there in the weeds thinking reputation management is merely a matter of getting rid of that nasty Facebook post or Twitter meme without taking the lead in communicating to the C-suite why the attacks on reputation are occurring? Have communicators been sidetracked by CSR into being the Pious Works department?

If PR doesn’t lead, then whom?

Jim Savage is principal of Reputation Leadership Group (www.reputationleadershipgroup.com) (RLG), of which Sean is a member of the board of advisors. They have been collaborating and co-conspiring happily for many years.

 

 

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One Response to “PR is NOT the Guardian of Corporate Reputation”

  1. Sean says:

    Thanks for writing this, Jim!

    BTW, the learned Dr. Kaiser has rather a lot to say in his article – http://viewer.zmags.com/publication/4f67eae8#/4f67eae8/26 (registration may be required) and one thing he notes is that despite very negative press coverage, many banks (in Germany) had record profits. This speaks to the issue of relevant media coverage – the popular press might decry evil bankers, but businesses need access to capital and other financing. What would be interesting is to judge the risk not only on the basis of financial performance, but on longer term factors – the health of the workforce, their willingness to recommend others to join the firm, referrals to the bank from relevant parties.