Corporate Reputation in the Hands of Chief Executive Officer

Reputation and perception start at the top. A recent study, Maximizing Corporate Reputations, found that a CEO's reputation accounts for 40 percent of how a company is viewed by stakeholders and outsiders.

The study, conducted by communications firm Burson-Marsteller, looked at more than 350 Fortune 500 companies and their CEOs across 35 industries. Some 2,500 individuals in six types of groups were interviewed, including CEOs, senior business executives, financial analysts, business media and executive recruiters and government officials.

The CEO qualities that matter most to all stakeholders are customer focus, credibility and the ability to communicate a clear corporate vision. Stakeholders agree that the primary role of CEOs today is to communicate a clear vision of the company's direction (60 percent) and to increase shareholder value (59 percent). In fact, communicating the vision takes precedence over creating it (60 percent vs. 41 percent).

Also high on the list of criteria are a CEO's ability to respond effectively to change, attract and keep a quality management team, maintain high ethical standards, and treat employees and shareholders with respect. Interestingly, philanthropic contributions are the least important criteria by which a CEO is judged.

A strong CEO reputation will not boost short-term sales, according to the study. However, three out of four respondents believe a CEO's reputation enhances a company's ability to attract investment capital, to recruit the best employees and to critically earn a company the benefit of the doubt in times of crisis.

Leslie Gaines-Ross, Burson-Marsteller's chief knowledge officer, says, "As the focus on CEOs increases, the reputation of a CEO can play a significant role in the fortunes of a company through good times and bad. CEOs need to be managed as individual brands today. This study provides the first ever evidence of the increasing importance of the CEO as chief communicator, shaper of the company's image and protector of its reputation."