ceo activism - ri.reptrak.com amsterdam 2018/ceo...social activism is high risk: nike “takes a...

The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed without

the express written permission of Reputation Institute. RepTrak® is a registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.

RLN Meeting Amsterdam

October 2018

CEO ActivismUnleashing the voice of the CEO

The presentation is confidential and contains proprietary information and intellectual property of Reputation Institute, whic h may not be reproduced or disclosed withoutthe express written permission of Reputation Institute. RepTrak ® is registered trademark of Reputation Institute. © 2018 Reputation Institute, all rights reserved.

Macrotrends are Changing CEO Expectations

There is a new era emerging

where reputational issues are

driving political, social,

environmental and economic

change -- giving CEOs

reason to rethink their role.

2


New Emerging Need for CEO Activism

The company’s active role in politics and public policy:

• Lobbying• Candidate contributions• Align with political committees and

campaigns funding

Past:“Political Activism”

For business gain

Leaders taking a public stand on political and social issues not just related to the bottom lines:

• Diversity and inclusiveness• Sexual orientation/gender• Immigration• Environment

Present:“CEO Activism”

For business and societal gain

Source: Harvard Business Review 3


Opportunity to increaseCEO Visibility1


Conversation About CEO Activism is Rife

Fortune’s CEO Initiative, June 2018 Forbes Global CEO Conference, October 2018

World Economic Forum, January 2018

5


Rising Demand for CEO Responsibility

Global 2018 CEO Dimension Weights

Source: Global RepTrak®

74.0 74.2

67.8

75.623.6%

31.2%

22.9%

22.3%

Factor Adjusted RegressionN = 10,500

Adj-R² = 0.51

Being responsible by behaving

ethically and caring about both fiscal

and social causes drives almost one

third of a CEO’s reputation.

6


New Type of Leader: “CEO With a Conscience”

But what does it mean?

• Balancing profits with a moral and ethical conscience

• Doing what’s right by society and shareholders

• Taking a public position on social and values-based issues that matter to the world and business

7

Society is demanding that companies, both

public and private, serve a social purpose.

To prosper over time, every company must

not only deliver financial performance, but

also show how it makes a positive

contribution to society.

Larry Fink, Chairman and CEO, Blackrock2018 Letter to CEO’s

New Expectations of a CEO


But Beware of the “Celebrity CEO” Phenomenon

Celebrity CEOs focus on their

personal brand, desire for populism,

and grooming their personal image

– these types of CEOs focus on

products and innovation – their

rising and falling celebrity status

exposes the company to risk.

8

Source: “Causes and Consequences of CEO Celebrity,”

Hayward, Rindova & Pollock, Strategic Management

Journal, 2004


CEO Activism Needs to Align With Corporate Purpose2


Speaking About Social Activism: Be Careful

Is it something that Apple has a special expertise on?...We should only speak when we have certain knowledge to bring to the subject. And I always ask myself do we have standing? Do we have a right to talk about this issue? And generally speaking…it’s not enough to be a large company to speak out.

Tim Cook Fortune CEO Initiative 2018

10

Speak to Competencies and Purpose

Equal Opportunity

Fostering Creativity

Being Entrepreneurial


Boldly Unleashing Activism for “Greater Good”

Paul PolmanGlobal CEO RepTrak® Pulse

74.0

74.2

67.8

75.6

75.6

73.2

75.8

79.2 76.7+ 0.7

vs. other CEOs


• Unilever’s Paul Polman has a strong reputation and strong scores across all dimensions

• Driven by a commitment to social responsibility he restructured Unilever as a model of responsible business practices

• Polman has a personal mission to galvanize the company and to be an effective force for good.

“If you don’t bring purpose to business, citizens of the world will ask: why are you around in the first place”

Paul PolmanCEO, Unilever

11


But “Good Intentions” Can Go Wrong

• Former CEO Howard Schultz introduced

the #Racetogether initiative in 2015

• Intent was to provoke discussion about race relations in America

• Many thought Starbucks had no right to talk about the subject due to their own corporate structure and racial dynamics

• In 2018, Starbucks faced new racial challenges due to a racially charged incident in a Philadelphia café

• In 2018 Starbucks subsequently conducted racial bias training

12


And Environmental Activism Can Back Fire

• BP’s former CEO Tony Hayward took an activist position on sustainability and climate change -- Beyond Petroleum

• The Deepwater Horizon oil spill brought to light the reality of BPs lack of integrity

• BP’s reputation has not recovered since the oil spill and remains weak

13Source: Global RepTrak® , BP Sustainability Review 2009

54.5

2018 Global RepTrak Score for BP

Unkeepable promise


Social Activism is High Risk: Nike “Takes a Knee”

14Source: Custom Nike Reputation Study

• Nike released a campaign including NFL player Colin Kaepernick – and brought to light the issue of racial inequality

• After the ad was released (Sept 2-4) online sales of Nike gear jumped 31% and Nike’s stock price traded at an all-time high

• But subsequent to the initial lift, Nike’s reputation is in the balance:

― The campaign message is powerful but polarizing

― There has been negative impact #Nikeboycott― Uncertainty as to whether companies should take a

stand social issues― Scores among Millennials is higher than Non-

Millennials -- but it has declined― Strongest reputation among African American

Millennials


Corporate Social Activism vs. CEO Activism?

15

• Nike’s Colin Kaepernick campaign is an example of corporate social activism rather than CEO activism

• In “taking a knee” on a social /political issue Nike aligning with and activated its brand purpose

• Nike’s CEO, Mark Parker has been in the background but publicly made a statement on ESPN to support the company’s stand

• He has been positively outspoken regarding the results of the Kaepernick campaign as well as “record engagement with the brand”

We feel very good and are very proud of the work we've

been doing," Parker said, speaking on the company's

quarterly earnings call. "We know our messaging is

resonating quite strongly with consumers here in North

America and around the world.

Mark Parker, President, Chairman and CEO, Nike, Inc.


CEO Activism Can Drive Reputation Lift and Enhanced Business Results3


CEO Shapes Company Reputation


55.0

60.0

65.0

70.0

75.0

80.0

85.0

55.0 60.0 65.0 70.0 75.0 80.0 85.0 90.0 95.0

CE

O R

epu

tati

on

Sco

re

Company Reputation Score Among Respondents Familiar with CEO

R² = 0.65

Association Between CEO Reputation and Corporate Reputation

17


CEO Impact on Reputation

• Among respondents familiar with a company CEO there is a reputation lift

+10.5 pts

• A company also benefits from a deeper emotional connection with an enhanced CEO familiarity vs. RT Index (rational) :

+2.0 pts

Significant difference > 1.4


Not Familiar with CEO

Company Reputation Based onFamiliar vs. Not Familiar with CEO

Familiar with CEO

76.0

+10.578.0 67.5

Pulse (familiar with CEO)

78.0 +2.0 76.0

RT Index (familiar with CEO)

18

Emotional Connection vs. Rational Understanding


How CEO Activism Generates Reputation Lift

Respondents Familiar with CEO

Respondents Not Familiar with CEO

72.0Citizenship

+ 9.9 points 62.1

73.1Governance

+ 9.6 points 63.5

77.2Leadership

+ 8.1 points 69.1

CEO Reputation Impacts Company Dimensions

Significant difference > 1.4


• CEO activism is linked with societal contribution and

ethical and transparent behavior.

• The highest dimension lifts among those familiar with CEOs are in the key dimensions of

citizenship and governance.

19


And Impacts Business Support

Respondents Familiar with CEO

Respondents Not Familiar with CEO

61.1%Purchase Intent+ 17.9% points 43.2%

48.0%Benefit of Doubt+21.0% points 27.0%

58.8%Recommendation+ 21.0% points 37.8%

CEO Reputation Impacts Company Business Support

% are Top 2 Box; respondents who gave a score of 6-7 out of 1-7 and not sure


• CEO activism is linked with positive business support.

• Among those familiar with CEOs the average support lift for purchase intent, benefit of doubt

and recommendation is 20% points.

20


Panel Discussion on CEO Activism



CEO Activism

Should your company unleash the voice of the CEO and take a stand on social issues ?



Our CEO Activism Expert Panel

Mark BlokCountry Communications Manager

Ikea Group

Herman BettenSenior Director Corporate Communications

DSM



Key Questions

• Tell our audience about your role and how does that align with CEO communications?

• What is the back story on your CEO and how have you historically leveraged them – as part

of your reputation management activities?

• What is your position on CEO activism and how does it relate to your company – what

issues do you plan to take a stand on?

• What are some of the key lessons learned in how best to unleash the voice of your CEO?

• What does the future hold for how you plan to leverage your CEO as a potential activist?



CEO ActivismUnleashing the voice of the CEO

RLN Meeting Amsterdam

October 2018

ceo activism - ri.reptrak.com amsterdam 2018/ceo...social activism is high risk: nike “takes a...

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