As transparency and purpose continue to lead the 'hot topics' for Boards and all organisations, research shows that most people think it's impossible for organisations to be both ethical and competent.
PR agency Edelman has been measuring trust for 20 years now and in their latest research which polled more than 34,000 people in 28 countries, they found that fear has eclipsed hope, no institution is seen as both competent and effective, and nobody has a vision for the future that a majority of people believe in. Read the full article here on Quartz.
So we’re supposed to be purpose-led and trustworthy, but no-one believes it anyway? That’s not a reason to avoid a deep-dive into this though. There are more pros than cons when it comes to being the company equivalent of ‘a good bugger*’.
Here in New Zealand, in late 2019 the Institute of Directors published a post where they outlined the five issues that should be top of mind for Directors as identified by the IoD’s Governance Leadership Centre.
Two of the five they’ve identified are ‘Governing for purpose’ and ‘Reputation and trust’. They describe these further:
“2. Governing for purpose
Purpose beyond profit is the key to remaining competitive and sustainable in the long term.
Purpose is the driving force to remaining competitive and sustainable in the long term and needs to be led by the board. We expect to see greater focus on purpose as companies continue to adapt to shareholder and stakeholder expectations.
4. Reputation and trust
Trust and accountability underpin reputation and brand.
Public attention and the power of social media, active regulators and the rise of litigation funding and class actions all add to an operating environment of heightened accountability for directors”
The element missing from the IoD piece, is as always, any real nod to how strategic marketing knowledge and people are crucial for making the right decisions in these areas. For achieving the desired outcomes and communicating them to the right people, at the right time, in the right way.
Board composition is more critical than ever, diversity of skills, risk appetite, age, experience, value-set, gender and ethnicity are even more important than ever as the S-curve of change gets tighter and the challenges and opportunities faced now are newer, bigger, and more badass than ever.
When it comes to organisational decisions around ‘reputation and trust’, with a table full of lawyers and accountants, I strongly doubt the right topics will be tabled, and if they are, neither the significance nor risk will be fully appreciated.
How many current Directors understand and value the implication of the one tweet from Kylie Jenner in 2018 that cost Snapchat a fortune? That one tweet took $1.3 billion off the company's market value.
You can see from the data from Statista that user numbers largely plateaued since then too.
Number of daily active Snapchat users from 1st quarter 2014 to 3rd quarter 2019
Those four buzzwords from the IoD all loosely fall under the broader term of ‘brand’ and no surprises here, this is a subset of Marketing.
Organisations that allow time in the strategy sessions and Board meetings to discuss brand, along with having those with strong knowledge and experience in understanding ‘brand’ and its implications for organisational performance in the room, will be better at understanding the interdependencies of these elements. They will be able to see the linkages, manage the highest opportunities and risks for the organisation, make informed and considered decisions, develop strong brand stories and enhance their reputation ideally for both competence and ethics. In doing so, they will lead the way and reap the rewards.
* Wikipedia says Bugger or buggar is a mild swear word and this tweet from @slangKiwi says that “good bugger = a friend, a person who is a giver and not a taker #kiwi #slang” That’s what I mean. Nice, good, reliable, dependable, capable, kind and trustworthy. A good bugger.
