NEDS HAVE ROLE TO PLAY IN REPUTATION MANAGEMENT, RESEARCH SHOWS
Non-executive directors play an important role. They offer support for corporate leadership, they bring in external expertise into the business and they can help safeguard corporate reputation. But, according to research by the Non-Executive Directors’ Association (NEDA), their value is still not fully taken advantage of by companies.
In the recent report, ‘The Independent Voice: Corporate Reputation and the Role of the Non-Executive Director,’ carried out by NEDA and IC consultancy Infinite Global, 25% of NEDs say corporate reputation is rarely on the board’s agenda, with 42% saying it is often discussed. However, 90% of respondents add that reputation is more important than ever before.
Louis Cooper, CEO of the association, says, “NEDs can play a pivotal role in bringing their skills, experience and independent voice to the table. In particular, they should make sure strategic reputational risks are on the radar, whilst also ensuring there is line of sight over operational risks that could come back to haunt the company.”
Despite the lack of focus on reputation, risk management is often a topic of discussion around the board room table. Financial performance and corporate strategy were two of the other important topics for boards, according to NEDs. And, reassuringly, 69.38% of respondents say reputation is being discussed more often now than it was five years ago, with most perceiving that number to increase in the future.
Scott Addison, UK board director at Infinite Global, says, “The calls are growing ever louder for corporate reputation to be given a more prominent role in boardroom discussions, but until now the role and remit of the NED in reputation management has too often gone under the radar. Media, public and other stakeholder scrutiny of business is increasing. In this climate, and especially in times of reputational crisis, there is a real risk that companies retreat into the corporate bunker. The NED has a clear role to play in bringing an independent perspective to reputational issues, helping to challenge the status quo. Companies must leverage this clearly under-utilised asset wherever possible.”