The days of CEOs being able to maintain a low profile are gone. In today’s social media-driven environment, business leaders must earn the trust of, not only their investors and employees, but also their customers. And with research showing that half of Americans view CEOs as having “bad” reputations, it’s more important than ever for CEOs to embrace their public persona and build a strong online reputation.
While some CEOs might balk at the idea of spending precious time controlling their online narrative, successful CEOs see the value in it—in fact, nearly 40% of Fortune 500 CEOs have an established social presence. Here’s why doing so is a smart business decision.
CEOs are the new brand ambassadors
For better or worse, the CEO is now the face of the company. This means that when people think of Facebook, for example, they picture Mark Zuckerberg. And the online conversation regarding him affects the public’s perception of his company.
After the Cambridge Analytica scandal broke, Mark Zuckerberg’s poor response to his company’s actions decreased people’s trust in the company. A Wired article by Jessi Hempel recently examined the relationship between Zuckerberg’s trust problem and the company’s:
“By masking an institution as an individual, Zuckerberg has helped that institution to grow to an unprecedented size and influence without the skepticism that might have led regulators to take it on much earlier. But by so closely aligning his identity with the company’s, he has opened Facebook to a new kind of vulnerability. Now it will be up to him to figure out how to repair his own credibility and, at the same time, stop Facebook from undermining democracy.”
A CEO’s online reputation is especially vulnerable
Because they are under so much public scrutiny, CEOs are highly visible targets for people who want to harm their online image. This becomes especially worrisome given the fact that any individual with a computer can quickly cause serious damage to a CEO’s reputation. Some common reputation attacks include:
- Bad reviews (whether from angry customers, disgruntled former employees, or unscrupulous competitors)
- Negative media reports
- Critical social media comments
One famous example of a CEO who experienced a reputation attack is Tony Hayward, the former CEO of BP. When he responded, “There’s no one who wants this thing over more than I do, I’d like my life back” to a reporter’s question regarding the 2010 Deepwater Horizon oil spill, he experienced a deluge of negative press and social media comments. As a result of the viral outrage regarding those last five words, BP stock fell 35% and Mr. Hayward was forced to resign his position.
“Whether it is fair or unfair is not the point. I—became the public face and was demonised and vilified. BP cannot move on in the US with me as its leader.” — Tony Hayward
Since this blunder, we have seen CEOs taking more ownership of their online reputations. Business leaders in all industries have learned that building up a positive online image not only mitigates the damage from reputation attacks, but it also serves as a buffer against the damage caused by any new negative content that appears.
Investors make decisions based on a CEO’s online reputation
According to research from the Brunswick Group, investors are increasingly examining the online reputations of companies and CEOs alike when making investment decisions. One of the biggest surprises in the study data for 2019 is the rapid change in investors’ expectations regarding top executives’ online communications. Half of investors (up 21 points from last year’s data) now report that they “use digital to learn what CEOs are saying.”
With this research in mind, being invisible online—or worse, having a negative online reputation—can limit your ability to attract investment, which can put the future of your company at risk.
A CEO’s online reputation influences a company’s bottom line
According to a survey conducted by Weber Shandwick with KRC Research, executives worldwide believe that a CEO’s reputation accounts for 45% of a company’s market value. And half of the individuals surveyed expect their CEO’s reputation to have an even greater effect on their company in the future. Moreover, the respondents stated that a CEO’s reputation was the fourth largest factor in determining a company’s overall reputation.
The survey also revealed that a good CEO reputation made staffing more cost effective. In fact, 77% of respondents said it helped their company attract new employees, and 70% claimed that it helped their business retain current employees.
Press about a CEO influences media coverage of the company
If a CEO receives bad press, then his or her company is more likely to also garner negative media coverage, according to a study published by the Institute for Public Relations.
The opposite is also true according to Nicole Lee, the author of the study. “If an organization is regularly bashed in the media, its CEO would likely struggle to maintain a positive reputation.”
A CEO’s reputation can also influence the angle a journalist takes when writing his or her story. As such, it can be the deciding factor in whether the CEO receives a scathing indictment or a glowing tribute.
Customers make purchasing decisions based on a CEO’s reputation
Because consumers have so many sources of information available to them, they no longer make purchasing decisions based solely on the quality of the product. According to Weber Shandwick’s Chief Reputation Strategist Leslie Gaines-Ross, purchasing “decisions are now increasingly based on additional factors such as the company behind the brand, what the company stands for and even the standing of its senior leaders.”
As such, CEOs need to carefully craft their online reputations to earn customers’ trust. CEOs who support a controversial cause or say something overtly offensive, risk losing current—as well as future customers—because news about the scandal will live forever in the CEO’s search results.
One example of a CEO’s reputation affecting his company’s sales is Lululemon founder Chip Wilson. In 2013, he made the mistake of publicly implying that customers’ weight was the reason Lululemon’s yoga pants were ripping apart at the seams after little wear.
“Frankly, some women’s bodies just don’t actually work [for the yoga pants.] It’s more really about the rubbing through the thighs, how much pressure is there over a period of time, how much they use it.”
After news of his comment went viral, customers lost faith in the brand and stopped buying. Consequently, the company’s stock plummeted and Wilson lost his job.
Tips for building a strong CEO online reputation
Savvy CEOs have learned from the mistakes that CEOs have made in the past. As such, they are incorporating proactive CEO reputation management strategies into their business functions and not waiting for a crisis before acting.
While it’s almost impossible to remove unfair comments or negative articles, there are things a CEO can do to make these items less prominent and reduce their impact on his or her online reputation. Some of the most effective methods include:
- Practicing corporate social responsibility: Research shows that a majority of consumers expect companies to make the world a better place, even if doing so has nothing to do with the business’s mission. Because CEOs are the face of their company, they need to publicly embrace a social or environmental cause and make driving change a part of the company’s business model. A good example of this is Lego Group’s CEO, Niels B. Christiansen, who has garnered the number-two spot on the Reputation Institute’s list of most reputable companies by introducing a series of CSR initiatives, including plant-based Legos.
- Engaging on social media: Some CEOs don’t see the value in crafting an online reputation on social media, viewing it as a time-wasting distraction or an intrusion into their private lives. However, being active on one or more social channels is one of the most effective things a CEO can do to steer the online conversation about his or her name. This is because search engines rank social content highly, thus making it more likely to be seen when people search for a CEO online. Marc Benioff, the CEO of Salesforce, uses his social media accounts to promote anti-discrimination policies to protect LGBTQ individuals. In doing so, he generates a significant amount of goodwill towards himself and his company.
- Getting involved in the community: Another good way for CEOs to build a positive reputation is by contributing to their local communities. This could include sponsoring a local little league team or helping deliver backpacks filled with school supplies for underserved children. It could also include volunteering at a local charity. For example, Tim Baxter, the CEO of Samsung Electronics of North America, boosted his reputation by participating in a Sleep Out event for New Jersey’s Covenant House in 2015.
- Becoming a thought leader. CEOs can gain the trust of customers and company stakeholders alike by establishing themselves as an industry authority. Some popular ways of doing so include writing articles, contributing to online discussions, and providing expert opinions to the press. Because the goal of thought leadership is to help others, not to sell anything, all communication should be in the CEO’s voice, not the voice of the company. A good example of a thought leader is Tim Cook, Apple’s CEO, who advocates for privacy rights.
For more information
Now that you know why reputation management is so important for CEOs, you might be interested in more detailed information about the specific steps involved. To learn more, see the following articles: