The Need For Reputation Experts In Corporate Boards

In modern corporate governance, the composition of a company’s board of directors (BOD) plays a pivotal role in determining its strategic direction, ethical standards, and ultimately, its success or failure in the market. Traditionally, boards have been populated with individuals boasting financial, legal, or industry-specific expertise.

However, today, more than ever, the traditional focus on financial performance and strategic oversight, while still paramount, is complemented by a broader array of concerns, including corporate reputation, stakeholder engagement, and issue/crisis management. The rapidly changing business environment, characterized by the rise of social media, the speed of information dissemination, and the growing importance of corporate reputation, has necessitated the inclusion of communication and reputation management experts in corporate boards.

The core argument for including communication and reputation management experts in corporate boards centers around the evolving challenges and opportunities faced by businesses in the 21st century. In an era where a single post on X, (formerly Twitter) can cause a stock price to plummet, and a well-handled crisis can enhance corporate reputation, the strategic value of strategic communication and reputation management in the survival and success of any enterprise and brand cannot be overstated. It has become imperative that we look at the company’s reputation as inextricably linked with its success or demise.

Thus, who better to advise the board than experienced executives who have spent their entire careers navigating complex reputation management scenarios.

Since a brand’s reputation is increasingly crucial in today’s marketplace (reputation is said to be worth 63 percent of a company’s market value) someone who can provide perspective on reputation within a larger framework can therefore, bring high value to any board. Risk oversight for boards often focused primarily on operational and financial concerns, but today’s forward thinking boards have begun to add reputational risks to the equation.

Today more than ever, all business enterprises should keep this mantra at the center of the value chain: reputation is our license to operate.

Indeed, the rationale for including communication experts on corporate boards is multifaceted. Firstly, these professionals bring a deep understanding of how to effectively communicate both internally and externally. They are adept at guiding messages that resonate with diverse audiences, including employees, customers, investors, and regulators. This skill is crucial in an era where information spreads rapidly and public opinion can significantly impact a company’s bottom line.

Secondly, communication professionals possess the acumen to navigate the complex landscape of media and public relations. In today’s digital age, where social media can amplify both positive and negative news, having board members who understand these dynamics is invaluable. They can provide strategic advice on managing media relations, responding to crises, and leveraging digital platforms to enhance the company’s brand and reputation.

Moreover, these professionals offer insights into stakeholder engagement, corporate social responsibility (CSR) and sustainability. As companies increasingly recognize the importance of shared values and sustainability, communication experts can help align these initiatives with the company’s overall strategy and communicate them effectively to enhance corporate reputation. Their understanding of societal trends and stakeholder expectations can guide the board in making decisions that not only benefit the company but also contribute positively to society.

Furthermore, the expertise of communication professionals is crucial in issue management. In times of crisis, swift, clear, and honest communication is essential to maintaining trust and confidence among stakeholders. Communication experts on the board can provide strategic guidance on managing the crisis, mitigating risks, and rebuilding the company’s image post-crisis.

Lastly, reputation management professionals often own the relationship between the organization and its regulators, government stakeholders and impact communities. Maintaining and promoting harmonious relationships with these stakeholders create huge impact in the conduct of business and can spell a huge difference in the sustainability of the business.

Despite the clear benefits, there is a noticeable hesitation in including communication executives in board positions. Based on a recent Spencer Stuart Report, only 16 chief communication officers sit on Fortune 500 boards. One reason for this is the traditional view of what constitutes ‘board-level’ expertise. Historically, boards have been dominated by individuals with finance, legal, or direct industry experience, under the assumption that these skills are most critical to understanding and guiding a company’s strategy. Communication skills, while acknowledged as important, are often seen as secondary or supportive, rather than strategic.

Additionally, there is sometimes a perception that communication and reputation management are not as quantifiable or directly linked to financial performance as other disciplines. This view, however, fails to recognize the significant impact that reputation and stakeholder relationships have on a company’s long-term success.

In an era where consumer trust can significantly impact a company’s bottom line, the strategic importance of communication and reputation management is increasingly evident. As the corporate world continues to evolve, the inclusion of communication experts on boards will become increasingly important in guiding companies toward sustainable success. It is time for the corporate world to broaden its perspective on what constitutes essential expertise at the board level and to recognize the strategic value of communication and reputation management in shaping the future of business.

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