While business may be clawing back the reputation it has lost in recent years, it can be shed as quickly and easily as ever
Reputation in business is a fragile thing. It’s like the British sunshine: with you one minute, gone the next.
This time last year, business reputation was in flight mode. Fewer than four in 10 of consumers on the UK high street had confidence in private companies “to do the right thing”, according to the benchmark Edelman Trust Barometer.
The reasons do not take much explaining. The financial crisis of 2007-8 hit everyone hard. Business people, especially bankers, were deemed the culprits.
Now, a few rays of sunlight are breaking through. A new survey by UK pollsters Ipsos Mori finds that 59% of British adults believe that UK businesses are behaving very or fairly ethically. Last year, the figure stood at 52%.
So why the increase? Simon Webley, research director at the Institute of Business Ethics, which commissioned the Mori report, admits the findings are “counterintuitive”.
The recession is only just lifting and public concerns over corporate actions, particularly around executive pay, remain front of mind.
For Webley, it’s a case of “diversion of attention”. The mind of the public has shifted from bad ethics in business in general, he argues, to bad ethics in government (following the MPs’ expenses scandal) and the finance sector specifically.
All the same, business would be wise not to let its guard down. The public’s tolerance of individual errant companies remains as high as ever.
Take BP. In the immediate aftermath of the Deepwater Horizon spill last year, the UK oil major slipped to last place in US polling company Vision Critical’s ReputationPlus ranking. (Notably, other energy companies and banks joined it at the bottom.)
And there’s the rub. BP might have led its sector on corporate responsibility for much of the past decade, but the knee-jerk reaction of the public can be swift and lethal.
Down the drain
As Webley puts it: “It takes three or four years to turn around a culture … but a company can lose its reputation in a day.”
Another company in the spotlight is Sky. The UK satellite television broadcaster attracted a string of undesirable headlines when two of its top sports commentators made derogatory remarks about female referees.
The pair no longer work for Sky. Not for the comments, which were made off-air, the company clarifies, but because of “inappropriate behaviour” towards female colleagues that later came to light.
Whatever the reason, Sky might have bought itself a lifeline. Acting fast in the face of irresponsible behaviour is critical to showing that a company is serious about its ethics.
Corrective action demonstrates a company’s acceptance that it is not perfect (which the public, by and large, accepts), but willing to improve. “If you respond in a good way and resolve it quickly and responsibly, it can actually increase trust,” says Graham McWilliam, group director of public affairs at Sky.
For Sky, it is too early to tell. The company – which is subject to a possible controversial takeover by News Corp – has some credits stored up thanks to a range of active corporate responsibility programmes.
Such programmes prove an incomplete umbrella when it rains, however. They might help “give you the benefit of the doubt”, McWilliam says, but they are not a “get out of jail” card.
The best way to maintain a good public reputation is not to test it. Ultimately, that doesn’t require sports-in-schools projects or conservation initiatives. It requires ethical conduct across the board.