What is the core of your research?
A. I lead research at Oxford which focuses on ‘social evaluators’ — this means reputation, trust, status and legitimacy. All four have significant value to individuals, companies, governments and institutions. We study how these assets are created, sustained, destroyed and rebuilt.
Q. Why do you say capability and character are key to how companies are perceived?
A. Capability and character are the two critical dimensions through which we evaluate entities — they are absolutely fundamental diagnostic frames. When we think about what organisations do, how competent they are, their record of making good products or delivering good services, etc., that is a capability lens. Our second lens encompasses impression s of organisational character this includes assumptions about a company as a customer, supplier, employee, regulator or any stakeholder group. Corporate character is very important when it comes to counterparties like investors and suppliers while capability is the lead indicator when it comes to customers.
Q. With businesses making commitments to ESG and net zero, will corporate reputations grow more prominent in the minds of consumers, regulators, etc.?
A. ESG strategies are all about the role of business in society which has become a dominant theme. We will increasingly see stakeholders asking what they can expect socially from a corporation, whether it takes care of the environment, whether it assumes responsibility for its products and services, etc. These answers are no longer just nice to have - they are must haves.
A fundamental change is taking place, which ties into the larger debate over the responsibility and future of capitalism. This discussion has returned after the Milton Friedman debate because of ESG issues and how investors are pressuring companies to think much more carefully about their ESG actions. Big tectonic forces are underpinning these changes in norms and expectations around business.
Q. Can you share key insights about building ‘reputational capital’ as discussed in your book ‘The Reputation Game’?
A. I’ve identified three different mechanisms in the book, all of which are in a company’s control. Reputation isn’t in a company’s direct control unlike its finance or marketing strategy. It is in the hands of others. You can’t control your reputation but you can influence it.
A. Purpose governance is about how you govern the articulation and enactment of purpose within your organisation. At the Enacting Purpose Initiative, we argue that purpose must be governed as a strategic north star, as opposed to a marketing tool. Purpose should be a fundamental articulation of why an organisation exists — that should then become the base framework on which you make investment decisions and choose how ..