Integrity drives reputation

Insight

It seems obvious and simplistic to say that integrity drives reputation. “Of course it does…” would be the response from almost everyone. 

Then why is there continuing dissonance between appreciation by executives that corporate reputation is a primary asset and the ways they are investing to protect it?

SenateSHJ’s Reputation Reality 2020 trans-Tasman report found that the three most important drivers of reputation continue to be integrity, relationships and quality of products and services for Australian and New Zealand organisations. The fourth driver, culture, impacts all of these.

Our findings are supported by BDO’s 2020 Global Risk Landscape Report where 99% of respondents agreed business integrity is fundamental to a brand’s reputation. 

Given integrity is such a core driver for building trust and confidence, and ultimately goodwill, it is alarming to see that 87% of the same 500 global C-Suite executives who responded to the BDO survey said their companies may be guilty of ‘integrity washing’. This is further compounded by the following findings:

  • 70% of the respondents believed their organisations had experienced an event that posed a threat to its reputation.
  • 49% agreed with the statement “So long as we are perceived to have integrity, we do not prioritise putting it into practice.”
  • 35% of respondents believed their crisis plan is reactive.

Our Reputation Reality 2020 report also noted a decreasing focus on crisis preparedness and respondent’s low confidence in being able to manage a crisis, particularly via social and digital media channels. Those surveyed also had little confidence in their organisation’s ability to effectively carry out their crisis communication plan (19% in New Zealand – down from 27% in 2019 - and 15% in Australia – down from 22% in 2019.

‘Integrity washing’, or ‘hoping she’ll be right’, is a recipe for disaster. Organisations guilty of this are inevitably found out, and in a very public way. The subsequent cost of trying to re-build their reputation far exceeds the ongoing investment and efforts in ensuring ‘actions align with words’. Not to mention it may even help keep the executives in their roles.

There is a good reason Australasian senior executives nominated integrity, relationships and quality of products and services as the top drivers of reputation in the Reputation Reality 2020 survey. They directly offset the most important reputation risks noted in the same report - customer dissatisfaction, data, privacy, cyber-security, regulatory changes and the threat of a poor-performing culture.

A culture which accepts ‘integrity washing’ not only puts a company’s reputation at risk but, as research has shown, costs billions in market value let alone the erosion of customer and employee trust.