Here's March 2018's Leadership Magazine article, it's on pg 78 and 79.
Honesty is the best policy
Corporate South Africa has over the past year learned many lessons in reputation management and the real value of stakeholder relationships, especially the importance of transparency.
In our data-driven approach to managing reputations using our proprietary reputation measurement model, we’ve seen the impact on the results and that companies are putting a lot more pressure on their leadership and boards to play open cards. When analysing the results from the surveys we conducted last year, the biggest average score change was for ‘corporate governance.’ The score dropped from 85% in 2016 to 80.1% in 2017, indicating the growing value stakeholders place on honest leadership and their apparent desire for even more transparency from directors at the top. This is not surprising as respective boards and leaders are ever increasingly being held to account by all stakeholder groups for their actions.
Last year we saw reputations being ruined overnight as big firms were found with egg on their faces, their dirty deals were splashed across the headlines.
In the past, transparency was associated largely with financial results; these days stakeholders are wanting to hear about the non-financial performance of a firm, such as their social, environmental and ethical performance.
When looking at the average reputation scores from last year’s research, it becomes very clear that Corporate Social Investment (CSI) projects are increasingly important to stakeholders. People want to know they are doing business with socially responsible organisations. This element received an improved overall score of 80% in 2017 (rising from 73% in 2016) and we believe it will follow an upward trajectory again this year, becoming ever more important in impacting overall reputation scores. The rise of conscious consumerism is leading organisations to invest in sustainable social projects.
The crux here is that stakeholders must be informed about these initiatives as this has a direct impact on their reputation score. However, with that said, stakeholders will very quickly decide if a CSI project is just a marketing ploy or if it reflects genuine care and effort to make a sustainable difference.
With regards to transparency and how best to tackle it in a large organisation, I chatted to Vasili Vass, Group Head: Corporate Affairs at e.tv about what transparency means in practice, especially at a media house. Here is his take on it:
What does transparency mean to an organisation?
In the corporate environment, transparency is the extent to which a company’s actions are observable by people outside the organisation. There has been a move towards increased transparency in companies listed on stock exchanges, with the inclusion of strategy, risk, performance and sustainability in integrated reporting becoming a requirement and the norm.
Transparency is critical for business given the nature of modern media, as actions they may have wanted to keep secret are more at risk of being exposed. Social media platforms make the dispersing of what might have been secret (or not transparent) in the past easy and fast.
Given this, an organisation’s actions should be scrupulous enough to bear public scrutiny.
Transparency in the context of media relations is as critical. And the old adage that honesty is the best policy really is wise advice to follow.
During a crisis, the easiest way to navigate the communication side is to be honest, offer as much relevant information as possible, as quickly as possible and then to continue communicating with all media on all platforms. That is, being as transparent as possible.
If an issue is addressed head on, by feeding the media storm with true and accurate information, it can be reported on, and the media will no longer need to investigate.
However, at times for many reasons, all information may not be offered. Reasons for this could include negotiations still being underway, confidentiality clauses, confidential employee and customer information and sensitive business strategy which you do not want to, or are obliged not to release. If pressed for information, you need to be honest and say you cannot release the information because it is sensitive and the reason why it is sensitive.
There is no such thing as no comment, that is a comment, and people will fill in the blanks with their own assumptions and messages.
What is the balance between too little and over sharing?
To find the balance between too little information and oversharing, you need to be strategic and thoughtful in what information is released. That is, the information must be relevant to the situation and the impact it will have on stakeholders now and in the future must be considered.
Honesty and transparency help build confidence with stakeholders, but you don’t need to offer information that is not sought after which in the long run can damage your relationship with stakeholders.
For transparency, you need to acknowledge a situation including information which will answer stakeholders’ questions, while not acknowledging if you don’t know the answer to certain questions and sticking to the actual situation and facts.
How do you know when you have that balance? Is it something that you measure?
When stakeholders believe they have information which satisfies their enquiry, while not compromising the organisation’s credibility you have attained the balance.
One shudders to wonder how some leaders go to sleep at night, knowing how many secrets they harbour and the lies they have to tell to cover up things which should never have been done in the first place. Wouldn’t you rather go to sleep at night soundly, knowing you have nothing to hide and that you run an ethical operation? Honesty is not only the best policy, it is the only way to keep all stakeholders confident in your business and to ensure your reputation is intact.
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