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Suit-red-tie-3-mics-and-phone1Nothing destroys reputation faster than an issue or crisis mismanaged, and new research reinforces that CEO performance and leadership is critical in determining reputation.

A Weber Shandwick reputation study  of global executives found that on average they attribute nearly half (45%) of their company’s reputation, and 44% of their company’s market value, to the reputation of their chief executive officer.  Moreover the study – involving 1,700 C-suite executives in 19 countries – found that half expect CEO reputation will matter more to company reputation in the next few years.

This data may seem encouraging, and an endorsement of strong leadership. But it also highlights just how potentially vulnerable companies are when things go wrong. In the world of crisis management this is very much a two-edged sword.

Effective leadership in a crisis can protect and even enhance reputation. 

But it doesn’t happen too often, so you have to go back to 2014 to find AirAsia CEO Tony Fernandes after one of his aircraft crashed into the sea off Indonesia. He stepped up, took control and famously said: “I am the leader of the company. I take responsibility. The passengers were on my aircraft and I have to take responsibility for that.”   PR Week concluded: “AirAsia CEO Tony Fernandes has given a lesson in crisis management.”

The downside of the leadership equation is that poor management in a crisis can severely damage reputation, and sadly that happens far more often…  

Think of Australia’s Chief Statistician David Kalicsh following the ABS census debacle. There was widespread public discussion about whether he should be dismissed, and even a prediction that after a few months he would be quietly allowed to resign.

Or consider Heather Bresch, CEO of the pharmaceutical company Mylan, trying to explain why the price of their life-saving epipens had risen from $164 to $608 in five years.  Instead of taking responsibility she blamed the “broken healthcare system” and the costly supply chain, finishing with the tone-deaf statement “No-one’s more frustrated than me.”  Coming from a person whose pay increased by over 670% in her tenure in charge, this response will probably rank as one of the sound-bites from hell.

Sadly, Mr Kalisch and Ms Bresch are not alone on bad apologies when things go wrong.

The Weber Shandwick study revealed that almost half the C-suite executives surveyed (49%) believe that apologies are overused, and more than a quarter (26%) think CEOs in general are rarely or almost never sincere in their apologies. 

If one in four company executives don’t believe CEOs, why should the public?

Which brings us to the other downside of the link between the CEO and reputation. Namely when executive misbehavior is the cause of the crisis. Research in the US shows that when arrests, lies or extramarital affairs of CEOs and other top executives are disclosed, their companies suffer serious loss of both reputation and market value. A study of 219 cases of executive indiscretion showed an average shareholder loss of $US226 million in the three days after the revelation. 

Furthermore, the researchers found that stock prices of companies of accused executives fell in total between 11% and 14% in the subsequent 12 months. And that firms where executives behaved badly performed poorly overall that year, were more likely to manipulate earnings, be sued by shareholders and be accused of fraud by the government. Worryingly the study also found that 65% of the accused executives kept their jobs, even those with repeat offences.

So when it comes to a crisis, a strong CEO reputation can be a valuable asset. But poor executive performance or behaviour can be a very costly liability. 

Tony Jaques ~ Issue Outcomes

Tony is a frequent conference presenter on issue and crisis management and has run professional workshops in Australia, New Zealand, the USA and throughout Asia. In addition he is author of the book “Don’t Just Stand There – the Do-it Plan for Effective Issue Management”  He also teaches in the Masters Programme at RMIT University, where he completed his Ph.D. in the field of issue management

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ON-CAMERA SKILLS TRAINING

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VIRTUAL PRESENTATION SKILLS

Your impression when presenting online has been important for many years, but it is now crucial with almost all business being conducted via videoconference. Stand out from the crowd with impressive skills, taught by our international keynote speakers and webinar hosts.

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LIVE ONLINE MEDIA TRAINING

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ELEARNING MEDIA AND PRESENTATION SKILLS

Cost efficiency, time flexibility and the opportunity to train many more people are the significant benefits of online learning. Mobile-enabled eLearning programmes and modules, webinars, live and static digital platforms and forums can be blended (if required) with face-to-face formats.

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MAYOR AND COUNCILLOR SKILLS TRAINING

Customised Media Spokesperson Skills training for newly elected Mayors and Councillors is highly recommended to ensure they are in control of their key messages and are able to hold their nerve in the face of a tough community meeting, as well as getting the media coverage they deserve.

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SCHOOL ISSUES AND CRISIS MANAGEMENT

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EXECUTIVE PRESENTATION SKILLS TRAINING

Whether you are presenting in person or on-screen, you only get one chance to make a first impression and that takes just a few seconds. Getting it right the first time is essential because repairing a poor impression is not easy.

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Every organisation is vulnerable to a crisis – it’s knowing the right way to deal with a situation that changes the way companies are perceived by their stakeholders and the media.

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MEDIA SKILLS TRAINING

Having good media spokespeople can make all the difference between a superior reputation and a bad one. That’s why training in this area will reap huge rewards for your business.

The Media Manoeuvres approach to media training across Australia is simple: Companies must have effective and efficient media spokespeople. Not only that, but training in this area should be ongoing for senior management, executives and team members.

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ROYAL COMMISSIONS & SENATE ESTIMATES

“Democracy in action” is how some describe this exhaustive process whereby Commissioners, Counsel Assisting or Senators can ask endless questions of witnesses appearing. News stories don’t always begin in a Royal Commission or Estimates, but it is often the place where details come out, and reputational damage for you and your organisation can result.

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A strategic approach to stakeholder and media communications, which addresses the importance of stakeholder needs, will guarantee connection and influence.
Designing thoughtful, meaningful and relevant stakeholder and media messages that align with company objectives is vital.

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How some describe this exhaustive process whereby Commissioners, Counsel Assisting or Senators can ask endless questions of witnesses appearing. News stories don’t always begin in a Royal Commission or Estimates, but it is often the place where details come out, and reputational damage for you and your organisation can result.

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