August 20, 2021 How well are you ‘explaining yourself’ on digital channels? Your company’s reputation could depend on the answer (Special Contribution)
Senior consultant and director of editorial, Bowen Craggs & Co
The shareholder-centric view of the corporation championed in the 1970s by American economist Milton Friedman is being questioned as never before, and this is having a direct impact on how large, global companies communicate with the outside world.
An alternative model, ‘stakeholder capitalism’ (so called because it accounts for the needs of all corporate stakeholders, not just shareholders) is gaining traction, even among investors.
On the big issues of the day – climate change, diversity, public health crises – companies are being forced to act by investors, employees, customers, journalists, and society at large. As a result, boardrooms and senior communications executives are starting to pay close attention to what their organizations are saying on their digital channels.
Are they promoting themselves where there are opportunities to enhance reputation, and defending themselves when there are risks?
Our recently published report, Explaining yourself in 2021: How to inform and persuade your stakeholders on corporate digital channels, looks at which companies are best at explaining who they are, what they do, and whether they are a good corporate citizen.
In the report, we explore and identify the leaders in three reputation-related metrics:
Building a reputation for responsibility:
- how well are companies using websites and social media to explain their environmental and social initiatives, address controversies, and communicate about corporate responsibility in a way that audiences will engage with and understand?
Environmental and social reporting:
- are companies backing up their claims with evidence; is reporting data visible, comprehensive, and backed up by accepted external standards such as the Global Reporting Initiative (GRI) and the Task Force on Climate-Related Financial Disclosures (TCFD)?
- how well are companies explaining the basics of who they are, what they do and how they are organized?
Digital reputation – big tech starts up
Technology companies in the United States have traditionally neglected their corporate (as opposed to customer-focused) digital channels, but this is changing. Amazon, Apple and Google have all recently risen towards the top of our reputation metric, scoring 14 out of a maximum 16 points. Much of the recently relaunched ‘About Amazon’ site is designed to defuse controversies – see Our Workplace, Our Impact and Our planet, all of which have material not shying away from or hiding what critics point to immediately – job creation and investment, diversity and inclusion, and paying tax. Social media channels are used highly effectively to promote Amazon’s sustainability credentials.
Investors ask to see the evidence
A key trend in corporate digital communications is to provide prominent links to environmental and social reporting data (known as environmental, social and governance, or ESG) directly in investor sections. Many global best practice companies have impressive ESG sections for investors, such as Novartis, Verizon and Shell.
Keeping purpose on point
Companies are talking a lot about ‘purpose and values’ on digital channels – a trend we’ve been tracking for a while. The problem is that purpose statements are usually boring and values are often clichéd. We know from our corporate website visitor surveys, however, that these pages are highly visited, so it makes sense to invest time and effort to make them engaging.
It is encouraging that even the most conventional of values can be brought to life with good examples. See Airbus’s well-made corporate videos, featuring employees discussing values such as ‘customer focus’, ‘integrity’ and ‘respect’.
Another way to stand out when discussing your ‘purpose’ is to just explain what you do as an organization clearly, concisely and factually. The European Central Bank’s ‘About’ page on its new website recognises that few people will know precisely what a central bank does. The page achieves the rare combination of educating visitors and positioning the bank as a societal benefactor at the same time.
There is unprecedented momentum behind stakeholder capitalism at the very top of the world’s biggest corporations and investment institutions. It is a clear opportunity for corporate communicators – who were stakeholder capitalists long before it was fashionable – to lead an effective response.
As more companies decide to communicate their environmental and social credentials online, it is more important than ever to make the way your company explains itself distinctive, compelling and engaging.
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