An overwhelming majority of business influencers remain confident that companies can restore a damaged reputation, according to new research by global communications consultancy Burson-Marsteller. The 2003 Building CEO Capital study reveals that 97 percent of business influencers believe a company can recover from a tarnished reputation over time. The study shows a surprising level of optimism in corporate America’s ability to regain the public trust, as numerous companies work to rebuild their reputations.
While confidence in restoring reputations is good news, the time needed to turn around a company’s reputation is not. On average, business influencers surveyed believe it takes nearly four years (3.65 years) for a company to rebuild a blemished reputation. Yet when asked how long it takes for new CEOs to turn a company around, business influencers allow less than two years (22 months).
"CEOs are already under considerable pressure to perform quickly under immense public scrutiny," said Dr. Leslie Gaines-Ross, chief knowledge and research officer at Burson-Marsteller. "Our CEO Capital study findings reinforce the need to give CEOs more time to demonstrate results. With increasingly short CEO tenures averaging four years today, the risk is that new CEOs won’t be able to reap the benefits of their reputation-building efforts while in office."
Of all the influencers surveyed, only the business media took exception to the four-year finding, believing that it takes companies slightly less than three years (2.96 years) to rebuild their reputations. Financial analysts and institutional investors hold companies to a higher standard, expecting it to take most companies nearly four years (3.86 years) to rebuild and restore their reputations. Other business influencers surveyed include CEOs, business executives, government officials and board members.
The study also shows that the direct relationship between CEO performance and a company’s reputation continues to grow – despite the dramatic rise and fall of major corporations and their chief executives.
"In these days of uncertainty and economic hardship, our research reveals that CEO reputations matter more than ever. CEOs are now being called upon to make far more difficult decisions and they remain the public face and ethical compass of the organization," noted Christopher Komisarjevsky, president and CEO, Burson-Marsteller worldwide.
When Burson-Marsteller first conducted its CEO reputation research in 1997, business influencers estimated that 40 percent of a company’s overall reputation was attributable to its CEO. This figure has grown steadily since then, increasing to 45 percent in 1999, 48 percent in 2001 and 50 percent in 2003.
The findings are the first set of results released from Burson-Marsteller’s 2003 Building CEO Capital survey. Additional results will be released later this fall on additional topics, including the combination of skills and qualities future CEOs will need to lead successful companies, the surprising number of CEOs who consider quitting their jobs, and whether or not the role of CEO and chairman should be held by one person or by two separate individuals.
About Building CEO Capital
The 2003 Building CEO Capital study is Burson-Marsteller’s fourth consecutive survey of influential business stakeholders since 1997 and was conducted with RoperASW. The study of 1,040 CEOs, executives, financial analysts, institutional investors, business media, government officials and board members examines issues relating directly to CEO and corporate reputation. Building CEO Capital has a margin of error of plus or minus 3 percent. For more information, please visit www.ceogo.com, Burson-Marsteller’s Web site dedicated to CEO research and information