As the UK economy slumps towards a recession, a period often associated with heightened reputational risks as consumers pay closer attention to the brands they buy, we should take note of what happened to reputations in the last period of dramatic financial uncertainty. “I think the reputation piece will take another five to ten years - and that’s what it is when your reputation gets tarnished so badly.” So said, Ross McEwan, when CEO of RBS on the tenth anniversary of the 2008 financial crash. In financial terms, RBS was recovering, but McEwan noted that the bank was still not trusted by customers at the levels they were pre-crash.

Intangible assets, like reputation, account for a significant proportion of what modern business is. According to intellectual property merchant bank OceanTomo, in the 2020s, the largest companies in the world’s assets are now 90% intangible. And yet it appears the responsibility for a company’s reputation is not worthy of a seat at the top table.

Website audit

A recent website audit by the Chartered Institute of Public Relations (CIPR) of the board of directors and executive leadership/management teams of the UK’s 100 largest companies was conducted to establish how many have dedicated communications professionals on the board. Individuals were assessed on the basis of job title and stated responsibilities as published on both the company websites and respective LinkedIn profiles.

The results showed that only three firms employed a comms director and just over half have a dedicated communications or corporate affairs expert (or hybrid) in their executive leadership or management teams. By contrast, 80 of the FTSE 100 companies have a dedicated HR figure at the top table. When it came to auditing board composition, only 29 had a non-executive with stated communications experience or where communication or corporate affairs was highlighted as an area of focus or relevance.

These companies are some of the most scrutinised on earth and, undoubtedly, reputation will be on their boardroom agenda. In an age of rolling news and social media they know they can become the front-page story for the wrong reasons.

PR value must rise

Research points to the value businesses place on their PR as having risen during and since the pandemic. Our FTSE analysis of publicly available data doesn’t talk to the relationship between a PR team and its board or the use of external consultancy support. But in a period of changing regulations, a cost-of-living crisis, labour shortages, and environmental concerns, when we know the risk of litigation, defaulting on agreements, supply chain issues, third party relation risks, or redundancies can impact the reputation of those businesses, it is a shock to see so few of businesses delegating responsibility of this to a senior professional.

When GDPR legislation was introduced, we saw businesses respond with the creation of the CIO. With the challenges businesses face, now may be the time for the CRO - chief reputation officer.

Written by Jon Gerlis, public relations and policy manager at the Chartered Institute of Public Relations (CIPR)