The CEO’s reputation

Maria Verónica Diaz RamosIPRN News, News

It is a fact that the majority of people do not recognize, and are probably not interested to know who is the leader of a corporation, what is his vision and his trajectory. However, for some stakeholders knowing the reputation of a company’s CEO is essential. Several studies, among which it is worthwhile to quote the CEO Reputation Premium, from the Weber Shandwick firm, estimate that 44% of a company´s market value depends on its CEO´s reputation.

In this sense, society demands new leadership. Edelman´s Trust Barometer, presented every year at the World Economic Forum, expresses that confidence in institutions and their leaders is lower than ever. This includes employers.

“The traits needed to be a great leader are changing rapidly. Evaluating the performance of a CEO based only on the company´s turnover is not enough anymore. There is a new emerging era, in which the intangibles in reputation are encouraging political, social and economic changes, giving the CEO reasons to reconsider their role as leaders. To be relevant today you have to be a leader with a conscience”. This is the reflection made by Stephen Hahn-Griffiths of the Reputation Institute at the presentation in Boston of this year´s CEO RepTrak®.

It is important to point out that the conclusions of the 2018 CEO RepTrak® identified that those companies that prioritize social responsibility, have a CEO with greater reputation against others who only focus on financial metrics. Great leadership is closely related to social contributions and ethical and transparent behavior.

Four basic dimensions are considered to evaluate the reputation of a CEO.

1. Leadership: The CEO has a strong image of leadership, he possesses a clear strategic vision and has the ability to anticipate change.
2. Influence: the CEO has communication skills, a global perspective and is perceived as highly influential.
3. Liability: the CEO acts responsibly, behaves ethically, and cares about social causes.
4. Management: The CEO is an effective manager, understands the business, and creates value for its stakeholders.

Gustavo Manrique Salas
Director of Strategic Communications & Partner at Stratego.