New research released by the Non-Executive Directors’ Association (NEDA) and international communications firm Infinite Global has shed a new light on the ‘pivotal’ role that Non-Executive Directors’ (NEDs) can and should play in the reputation management of modern, 21 st Century organisations.
Based on a survey of NEDA members (including both current and aspiring NEDs), the report – ‘ The Independent Voice: Corporate Reputation and the Role of the Non-Executive Director' – found that a full quarter (25%) of NED survey respondents stated that corporate reputation was rarely on the agenda at board meetings. Further, corporate reputation ranked as only the sixth most important business issue (out of eight options) overall in organisations, behind HR and Governance.
Despite this, NEDs in the survey were almost unanimous (90%) in the view that media, public and stakeholder scrutiny of business had increased in the last 5-10 years.Indeed, few can dismiss the swelling tide of media, public and stakeholder scrutiny, growing focus on corporate transparency and trust, and a general lack of boardroom focus on reputational issues thus far, according to the report.
Putting reputation on the board agenda
While there have been loud and frequent calls for reputation management to be given a more prominent role in boardroom discussion, the report found that NEDs believe there is more work to be done and calls for industry action to further embed reputation management in the boardroom agenda – notably through leveraging the expertise and drawing on the ‘independent’ voice of NEDs.
- Looking ahead, 90% of respondents said they expected corporate reputation will be discussed more at board meetings in the next 5-10 years.
- Importantly, too, the vast majority of NEDs who responded (82%) said corporate reputation is something that can be addressed strategically, while two-thirds (66%) believe companies could do more to actively manage and protect their reputation.
- Furthermore, as digitally integrated communications continue to yield more reputationally significant data and insights, more than half (57%) of NED survey respondents believe that key corporate reputation metrics should be assessed and reported to the board on a monthly basis.
The role of the NED
The NED, with their ‘independent’ voice within organisations, has a clear role to play in this landscape – and that role has not yet been fully realised, the report indicates. More specifically:
- Over half (56%) of respondents felt that advising on corporate reputation management is a key part of the NED’s remit, and a similar proportion feel that their independent perspective provides them with a particular ability to advise on such issues.
- However, 30% of NEDs admitted they felt only partially prepared to address reputational issues, and only around half (45%) of respondents discussed corporate reputation management during their NED interviews.
- NEDs do, though, feel empowered to seek external advice on reputational issues, with specialist PR advisers most often being the first port of call according to respondents.
Scott Addison , UK Board Director at Infinite Global, commented:
“The calls are growing ever louder for corporate reputation to be given a more prominent role in boardroom discussions, but until now the role and remit of the NED in reputation management has too often gone under the radar.
“Media, public and other stakeholder scrutiny of business is increasing. In this climate, and especially in times of reputational crisis, there is a real risk that companies retreat into the corporate bunker. The NED has a clear role to play in bringing an independent perspective to reputational issues, helping to challenge the status quo. Companies must leverage this clearly under-utilised asset wherever possible.
“While far from definitive, we do hope that this initial research helps to start a proper debate about these issues, and to drive greater collaboration between communications professionals, the NED community and boards. We welcome the opportunity to work with these and other corporate stakeholders to maximise on the potential value NEDs can bring to reputation management.”
Louis Cooper, CEO of the Non-Executive Directors’ Association, added:
“Fundamentally, NEDs are in post to hold the Executive Team to account . While the CEO and Executive Team have day to day responsibility for managing reputational risks, the NED has a pivotal - but as yet not fully realised – role in the active management of company reputation given the experience they can bring from a range of other organisations. The NED needs to advise, support and challenge boards to help protect and enhance corporate reputation, but they must be empowered to do so balancing their experience with on-going personal development, as well as support from other board members.
“This new research is timely, and a welcome restatement of the value that NEDs bring to the companies they serve. By engaging more deeply with communications professionals, I am hopeful that we can both raise awareness of the role of NEDs in reputation management whilst also encouraging communications professionals themselves to plan their own role as a future contemporary NED.”
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