1st Corporate Character Barometer shows gap between corporate readiness and stakeholder expectations
Brands aren’t taking stands, though they know audiences want them to.
Corporate communicators are constantly faced with decisions on whether their brand should speak out on important social issues. Abortion rights, gun control, climate change, voting rights, the war in Ukraine, diversity and inclusion … the list goes on and on.
They are inundated with data showing their stakeholders demand to hear these points of view. In fact, 70% of consumers believe it’s important for brands to take a stand on social issues, according to SproutSocial. That number rises to 75% for Gen Z and 80% for Millennials.
As we approach one of the most divisive (and decisive) election days in recent memory, many communicators seem to be searching for a consistent, coherent strategy for determining when and why to speak out on these topics. That’s the bottom-line conclusion of a recent Peppercomm/Ragan study. The inaugural Corporate Character Barometer (CCB) surveyed nearly 400 communications professionals as the midterm elections quickly approach.
The survey set out to measure the willingness and readiness of brands to take a stand on the societal issues of the day, as well as their experiences when they do speak out. The survey also examined their work to articulate and activate their corporate purpose.
Despite the 24/7 discussions around these topics among external stakeholders and employees, more than half (55%) of communicators said their brands are not likely or are somewhat unlikely to take a stand in the coming quarter.
These numbers stand in stark contrast to another key statistic: 66% of survey respondents said it is important to their employees that the CEO communicates a point of view on controversial issues. This indicates a gap in brand behavior versus stakeholder expectations that could cause serious problems for some brands, especially considering that the No. 3 reason workers quit a job in 2021 was because they felt disrespected at work.
Peppercomm and Ragan are using this data to establish the Corporate Character Barometer (CCB), which stands at 18 out of 100. This indicates that only 18% of organizations are very likely to speak out on societal issues in the next quarter. The CCB will be updated on a regular basis with real-time data to serve as a guidepost on brands and their willingness to engage with stakeholders on matters trending in the overall zeitgeist (see sidebar).
We asked a panel of communications experts to comment on this data, and whether the 18% statistic surprised them. These were some of their answers:
It doesn’t surprise me at all. The political landscape has become so overly polarized. People are ready to fight over politics at the Thanksgiving dinner table. Brands and companies do not connote in themselves a clear political identifier. After all, both liberals and conservatives drink soda. Brands face a political minefield if they are not careful. But there are social and public policy positions that might be strategic and smart for them to take.
Mike Fernandez
CCO & Senior VP, Public Affairs, Communications & Sustainability
Enbridge
This does not surprise me. First, let’s recognize these numbers reflect a significantly higher tendency toward corporate social activism in recent years. That said, while data from various surveys show stakeholders want to see more tangible efforts by corporations to effect change through their environmental, social and governance policies –- and in some cases they do want to see companies take stands on social issues –- they also have zero tolerance for performative gestures that are not backed by action. Given how polarized our society is right now, it is reasonable for even the most socially conscious companies to be careful about advocacy stands on certain issues.
Pat Ford, Professional-in-Residence
College of Journalism and Communications
University of Florida
This doesn’t surprise me. It is challenging for most brands to take a stand on serious societal issues while navigating a heated political season, as it forces them to confront ideologically polarized populations and risk alienating some of their customer base.
Juan-Carlos Molleda, Ph.D.
Edwin L. Artzt Dean and Professor
School of Journalism and Communication
University of Oregon
Our survey suggests that a major reason many brands are reluctant to speak out is because they are not fully prepared. Only 23% said they have created frameworks or playbooks to help their brand respond to recent societal controversies, such as the overturning of Roe v. Wade, mass shootings and other topics. Roughly two in 10 have started frameworks but not finished them. The majority (51%) reported they have no playbooks in place.
In conversations with communicators, a key challenge that emerged is not just deciding if they should speak out, but truly understanding if their brand has the credibility to do so. Communicators report that the risk of speaking out is exacerbated by the potential for being called out for not walking the talk. For example, can a company speak out on reproductive rights when 80% of its leaders and board members are men? Can a brand boast about its commitment to curbing climate change when its top executives regularly fly on private jets?
Many comms leaders report they simply do not have the ability to take a good, hard look in the mirror to ascertain all their risks. Understanding where gaps exist is critical to informing a process or playbook, but many say they lack the objectivity to do it themselves and need outside expertise to hold up the mirror. This step is critical to understanding the risks of speaking out and properly guiding senior leadership through the decision-making framework.
This is what our panel of communicators had to say about the lack of frameworks in place:
I’m surprised and a bit appalled. There are smart positions to take. Working with communications, government relations and public affairs teams and keeping in mind the organization you work for, you should be establishing a framework for what’s important. You can’t put your head in the sand. You don’t have to take a position on every issue, but you should have a rubric that gives you a sense of whether a position helps you or hurts you and considers all your stakeholders. You even need a lens to be able to talk to audiences about why you didn’t take a stand.
Mike Fernandez
This number does surprise me, and I believe we will see many companies accelerating their planning in this area in the next few years. Given the pressures top companies have faced in just the past 2-3 years –- for failing to take stands and/or facing backlashes when they did –- this should be elevated on the 2023 to-do list for major companies –- particularly given the prospects for one of the most contentious and dangerous presidential election cycles as we approach the 2024 elections.
Pat Ford
This does surprise me because brands are embedded in a marketplace full of passionate debates on controversial societal issues. At a minimum, I would expect clear statements of brand responsibility/purpose and values as core components of a communication strategy guiding responses to serious societal issues that impact their stakeholders.
Juan-Carlos Molleda, Ph.D.
Knowing that taking the right stand on the right issue at the right time can increase brand affinity, loyalty and audience engagement, our survey asked communicators if taking a stand has had any positive impact on their brand. Four in 10 said yes. Alternatively, only 24% reported that having a POV had negatively impacted perception.
Communications pros were also very clear on the best tactics to use to display corporate character to external and internal stakeholders. Nearly six in 10 respondents (56%) said CEOs speaking out is one of the best ways to show corporate character. An additional 60% said expanded benefits for employees were also a key character indicator, while 46% and 45% respectively pointed to volunteering and making donations as ways to show purpose-driven action.
Where exactly does corporate purpose fit in?
For many years, most organizations have been working hard to define their corporate purpose: the reason they exist beyond making money. Indeed, our survey indicates that purpose guides most organizations. An overwhelming 89% of respondents said they have a very well-defined or well-defined purpose. An even larger group 94% said that purpose is somewhat or very important in guiding their day-to-day activities and decision-making.
Moreover, purpose has grown in standing in the past few years. Nearly half of respondents said their purpose is much more or somewhat more important than it was before the pandemic.
Once again, our panel weighed in:
First of all, the skeptic in me says that, of course, people are going to say they have a well-defined purpose. Second, one would think how you engage in social issues and public policy will align with your brand’s purpose. An organization should take a stand on issues that are relevant to its purpose and its stakeholders. There has to be alignment with purpose and taking a stand. Companies should be asking: Are we walking the talk? Are we being what we aspire to be?
Mike Fernandez
Over the past 15-20 years, we have seen rapid evolution in corporate planning and policies regarding the implications of their corporate purpose, mission and values. As this evolution continues, and particularly as more companies link their own corporate purpose to the global goals reflected in the UN Sustainable Development Goals, I believe we will see more social advocacy, but corporations will still need to pick their spots carefully before they wade into the highly polarized, often toxic political maelstrom that exists in many countries around the world.
Pat Ford
It may look like a disconnect, but brands must evaluate the timing and potential impact of taking a social stand on various issues on their operations and business outcomes. For instance, speaking out about controversial societal issues during a heated political season with ideological polarized populations risks pulling customers’ attention and focus away from the core activities of the organization.
Juan-Carlos Molleda, Ph.D.
Given that corporate purpose is so closely associated with corporate character, our survey begs a glaring question: If so, many companies claim to be purpose driven, then why are so few of them willing to speak out on the pressing issues that are affecting so many global citizens?
The reason for this disconnect may well be that corporate purpose is often inward facing. “Purpose” is defined as the reason people in an organization come to work every day. Today, many issues management frameworks focus on how a business issue or crisis affects the organization. In those cases, an inwardly focused purpose is extremely valuable in helping the brand determine how best to respond to a situation. But, most often, a societal issue does not directly impact a business’ day-to-day operations, but rather its stakeholders. Therefore, a corporate purpose is only half the equation.
Please visit www.peppercomm.com/CorporateCharacterBarometer to learn more.
Matthew Purdue is SVP, content strategy at Peppercomm.
What makes Purdue and his Peppercom firm terrific is their recognition of what matters most in PR: not just success of the PR program and PR career but
most important, success of the client.
It’s like religious guidance: “What shall it profit one,” asks Biblical wisdom, and then it talks about gaining the world and possibly losing one’s soul. Notice that coming first is the question of what it shall PROFIT and then about gaining the world.
“Tell your story,” says another excellent PR Daily report today, “when everyone else has gone quiet.” That’s part two of a good recipe for the success of a PR effort and a PR career: (1) create client PROFIT, not just media coverage, and (2) TELL YOUR STORY of how the client is helping fill the gap between corporate readiness and stakeholder expectations. What to tell is suggested by Peppercom’s barometer of corporate social responsibility: Tell how the client is helping to fill the gap between corporate readiness and stakeholder expectations.
Tell your story of what the client is DOING for the public while others remain silent. Just as pets enjoy a tasty snack and as corporate behemoths love great restaurant meals and great deals, the public loves a satisfying answer to an urgently important public question: what are you doing for the public?
“Tell your story,” advises PR Daily, and often a key part of that story is what the client is doing for the public. Quality ingredients. A good price. Corporate social responsibility. Readiness to tell that story helps fill the gap of how the client benefits the public and why the client deserves ample profit for doing this.
PR success is not clippings, air time and online comment but is client profit that results from doing what PR Daily and Peppercom urge: tell your story when others remain quiet.
Kudos to Ragan and Peppercom for forging ahead with this metric of corporate character. One other metric that is extremely helpful is examining corporate behavior. How an organization behaves directly tracks with reputation and character. When an organization is seen behaving in the best interests of society that is where the rubber meets the road. Telling your story is important, no doubt. But seeing is believing.