Maximizing Corporate Reputation Through Effective Governance

The aim of this dissertation research is to develop an understanding of how components of the organizational structure, leadership structures at the top level and resource allocation decisions may affect corporate reputation as defined by the reputation quotient(RQ),and which aspects of running a company top management should keep an eye on in order to maximize the reputation of their company? Based on a literature review on the topic of corporate reputation and governance, which comprises the first part of the dissertation, a positivistic, deductive approach was chosen and a self-administered questionnaire has been developed that was sent out to the CEOs of the 60 companies currently covered in the 2002 RQ-rankings. The detailed discussion of the research method can be found in the third chapter. Due to a low response rate, the original research approach had to be adapted, in that - where available - the information requested in the questionnaire was filled by the author with publicly-available data from various sources, including the Securities and Exchange Commission (SEC), brokerage reports, company web sites and third-party information providers, aggregating information from these sources. Because the data points obtained this way, in all cases are based on official company disclosures (i.e. SEC-filings,press releases, published web sites), for which the companies are held legally liable, it is assumed that the quality of the data points obtained this way is just as accurate as from having received it as part of the filled-out questionnaires. This for one, because of the legal implications mentioned above and for the other because the answers to the questionnaire would have been based on the same internal data used to provide information to the Securities and Exchange Commission and general public. This adaptation of approach narrowed down the original sample size of 60 to 32 companies, because for 28 companies not sufficient public information was available and/ or the companies were not listed in both the 2001 and 2002 RQ-rankings. A second effect is that fewer of the originally intended aspects, especially relating to leadership, could be investigated, as no reliable public information was available. Nevertheless, the sample size was sufficient to draw statistically valid conclusions.

With the collapse of high-profile companies such as Enron and Tyco, worldwide anti-globalization protests, and recent revelations of questionable behavior by financial groups and auditors, corporate behavior has become the highest priority topic for businesspeople, investors, politicians and the public. Yet despite the critical importance of maintaining public and shareholder trust, most corporations make very little formal effort to actively manage the activities that can put their reputation, share price, and customer base at risk. Most corporations officially embrace the concept of Corporate Social Responsibility; but giving money away to local communities or worthy causes will not prevent an ethical disaster. The problem is not social irresponsibility; the problem is a lack of knowledge about what is taking place in the company or at its subcontractor sites. What companies need to be thinking about is not a theoretical construct around Corporate Social Responsibility, or how they can spin public opinion by charitable actions. They need to be thinking about how they can create a practical knowledge and risk management framework in their company that allows them to avoid costly and reputation-damaging behavior in the first place. Ultimately, this comes down to knowledge management. Whether violations of human rights, employment law, or environmental standards - or simply accounting shenanigans - invariably the reason that these activities are not anticipated and avoided is simply that executives and board members do not realize what is happening in the organization, and what the likely implications of actions will be. And the larger the organization, the more extensive that lack of knowledge. The good news is that developing a strategic approach to corporate integrity is neither exceptionally expensive nor particularly difficult. The problem is that companies that are already using sophisticated information technology and knowledge management tools for gathering internal and external information have focused those systems and practices almost exclusively on operational issues and increasing productivity. But these same knowledge management techniques - built around emerging ethical guidelines being developed by international standards groups - can be used by companies to create an effective global policy for building and maintaining corporate integrity. This means applying knowledge management techniques in three important areas: * First, they need to mobilize key employee knowledge and the vast amount of information available on potentially sensitive issues in a way that allows key decision-makers to "sense and respond" quickly and correctly to developing risks. * Second, it means creating objective, scenario-based guidelines for ethical behavior, communicating those guidelines using knowledge management techniques among key organizational leaders, and providing a workable system of incentives for managers to surface potentially dangerous issues. * Third, companies need to adopt emerging guidelines such as AA1000 that provide for ethical procedures and performance indicators that enable companies to audit and monitor their own behavior, and also to provide shareholders and the buying public with an objective report on the company's ethical performance. Much like ISO 9000, Six Sigma and other performance and productivity and practice standards of the 1990s, these new global ethics standards will inevitably become a baseline by which investors and customers judge a company's potential for future growth and stability. High marks on auditable ethical performance set against these guidelines will become an important way for companies to differentiate themselves from their competition in the future. Developing a workable program for corporate ethics will be one of the most important issues of this decade, and will be "the next big thing" for large organizations. A drive toward standardized reporting of corporate ethics practices was coming anyway; the recent public corporate disasters will only encourage corporate executive teams to scramble to demonstrate to customers and shareholders that their organization takes these issues seriously. This book, therefore, will be a primer for business people and business students worldwide who will shortly be tasked with devising or participating in those types of corporate integrity initiatives, and will explain how knowledge management is indispensable as a tool for helping corporations to manage their risk and integrity policies. Through a mixture of leading practice case studies and a clear framework, it will show how a corporation can begin to combine leading practices in risk and knowledge management with emerging international guidelines in order to develop and manage a program of corporate integrity.

"Roger Haywood is one of the practitioners who have set the standards that the industry must follow. This is a must read." -Sandy Scott, Director General, the Chartered Insurance Institut eAll organizations must manage their public relations (PR) with intelligence and integrity if they are to safeguard their reputation. Corporate Reputation, the Brand and the Bottom Line draws on real-life experience to give the reader clear guidance on how to plan, promote and implement effective PR programmes. It also examines the concept of the corporate reputation acting as an umbrella across brand reputations.There is practical advice on how to: avoid disasters; set easily understandable objectives; win favourable media coverage; control the cost of a programme; measure results; recruit the right people.

This unique volume expounds on the nature of white-collar crime and examines its relationship with corporate social responsibility, governance and corporate reputation. Based on empirical study and extensive literature review, this book presents different approaches for repairing damaged corporate reputations and also explains how internal governance and investigations can be conducted. Stages in corporate social responsibility are discussed and knowledge management is underscored as an imperative tool to combat white-collar crime and build corporate reputation. Contents:White-Collar CrimeCorporate ReputationReputation Damage and RepairInternal InvestigationsCorporate ComplianceCorporate GovernanceStages of Corporate ResponsibilityForensic AccountingKnowledge ManagementIntelligence Strategy Readership: Business course undergraduates, MBA students, students of governance, business ethics, corporate communications/public relations and corporate crime; management executives; auditing and corporate communications professionals. Keywords:Corporate Social Responsibility;Corporate Governance;Corporate Reputation;White-Collar Crime;Knowledge ManagementKey Features:Damage and repair of corporate reputation after white-collar scandalsStages of corporate social responsibilityKnowledge management for corporate social responsibilityReviews: “White-collar crime represents a serious threat to corporate reputation. Nevertheless, there are surprisingly many corporations that are involved in white-collar crime. A recent study found that 40 percent of the top-ranked corporations in the Swedish business world have been involved in white-collar crime in the last decade. These corporations had decisions against them, such as court decisions, administrative law, objection, or settlement. Petter Gottschalk's book covers important topics for crime prevention by linking white-collar crime to responsibility, governance and reputation in business enterprises.” Dr Stefan Holgersson Police Superintendent, Swedish Police Force & Assistant Professor, Linköping University, Sweden “White-collar crime can be difficult to detect, both by internal entities such as internal audit and control units, as well as by external entitites such as the stock exchange, the tax authorities and the police. Petter Gottschalk has written an important and interesting book that links white-collar crime prevention to corporate social responsibility, governance mechanisms, and corporate reputation damage and repair.” Dag Styrvold former Norwegian Police Superintendent and current instructor Norwegian Police University College for the education of officers to battle white-collar crime

There is growing interest regarding the sustainability of communities. This volume offers a critical review of current trends around Corporate Social Responsibility and sustainability activities in developing economies. It is a must have for business practitioners, policy makers, experts in supranational organizations, academics and students.

Increasing media scrutiny, global coverage and communication via the internet means corporate reputation can be damaged quickly, and failing to successfully address challenges to corporate reputation has consequences. Companies generally suffer almost ten times the financial loss from damaged reputations than from whatever fines may be imposed. According to Ernst & Young, the investment community believes up to 50 per cent of a company's value is intangible - based mostly on corporate reputation. So recognizing potential threats, or anticipating risks, emerges as a critical organizational competence. Organizations can regain lost reputations, but recovery takes a long time. Corporate Reputation contains both academic content along with practical contributions, developed by those serving as consultants or working in organizations in the area of corporate reputation and its management or recovery. It covers: why corporate reputation matters, the increase in reputation loss, threats to corporate reputation, monitoring reputation threats online and offline, the key role of leadership in reputation recovery, and making corporate reputation immune from threats. Any book that is going to do justice to a subject that is so complex and intangible needs imagination, depth and range, and this is exactly what the contributors bring with them.

The Vulnerability of Corporate Reputation explores the role that reputation plays in the success and failures of companies. This book focuses on the traditional topic of reputation risk management, the process of reputation, reputational excellence and examines leaders whose reputation and foresight could benefit the organization they steer.