Organisation’s culture an increased risk to reputation: Study

Organisation’s culture an increased risk to reputation: Study

An annual survey of senior leaders has found that the culture of an organisation is increasingly critical to its reputation.

The 2020 Reputation Reality report, prepared by SenateSHJ in partnership with the Governance Institute, surveyed 278 senior executives from Australia and New Zealand.

The results, released today, found that integrity, relationships and quality of products and services are the three most important drivers of reputation. Culture is fourth on the list – but impacts all of these.

Two thirds of senior executives surveyed said that reputation is more important to manage now than it was three years ago, but is harder to manage than other types of risk.

SenateSHJ’s Managing Partner, Darren Behar, said that many senior executives now recognise that culture underpins reputation.

“The biggest reputational crisis of 2019 were all in some way the result of culture,” Mr Behar said.

“It is a surprise that culture ranks only fourth in the list of drivers of reputation given the growing awareness of its importance and the high-profile discussion about culture within regulators, industry bodies, government and boardrooms across the country. We would expect it to continue to rise in importance.”

Governance Institute of Australia CEO, Megan Motto said it is up to an organisation’s senior management team to ensure they are setting the benchmark for culture and ethical practices.

“The CEO and senior management of an organisation have the most influence on the culture and overall ethical practices of the business,” Ms Motto said.

“Good culture is critical for long-term value for shareholders and stakeholders, and to attract and retain the talent to be innovative.”

Other key findings from the report include:

• Almost 80 per cent say risks affecting their organisations have increased in the past three years
• Chief Executives are nominated as the number one trusted source of information in a crisis
• Almost three quarters rank stakeholder engagement as a crucial area in which to invest
• Under a third of organisations surveyed test their crisis communication plans annually
• Less than a quarter of organisations are ‘very confident’ in managing digital and social media channels during a crisis.

Click here for report.