TO WHAT EXTENT SHOULD INTERNATIONAL COMPANIES EXPRESS THE CULTURE AND PERSONALITY OF THEIR HOME NATION?
Guy Lane, content consultant for Zebra Corporate Communications, looks at international brand identity and whether companies should address their home nation in corporate reporting.
First we need to consider if global corporates have a home nation. Culturally speaking, they very probably do. Are Apple, Facebook, Google, Starbucks, Nike, Coca-Cola American? Yes. Is Luis Vuitton French? Of course. Are Gazprom, Aeroflot, Lenta Russian? Of course. Is Aramco Saudi? Of course. But what is the international, global, accepted reporting language and format for all these corporates? English... and IFRS, ESEF and a host of internationally accepted reporting formats and best practice requirements.
So this is accepted by all: companies addressing corporate audiences internationally use a standard language and reporting system. But where it gets more interesting, and more discretionary, is in the area of brand expression, the corporate soul, the answer to the question ‘Why do we exist?’ rather than simply ‘What do we do?’, ‘Who are we?’, ‘How much money do we make?’, etc.
The emotional content of reports attempts to address the reason to exist and supports the brand and reputation, key elements in ultimately valuing a company’s intangible assets.
Large Gulf and Russian corporates have their own local style, culture, language, people and values but want – and need – to present themselves as global citizens. They may be seeking capital in London or New York, they may be doing business around the world, they may wish to communicate effectively with global audiences.
Yet there may be deep-rooted, strong local roots and a sense of identity that it is based on their own origins and civilisation.
So when they report their aspirations and performance in annual and sustainability reports it is advisable to tread a middle path. Yes, meet best practice international standards, provide an English version, recognise the needs of the international community. But also, yes, convey the brand personality and corporate ethos in their own cultural terms.
Historically there has been a great tendency for the world of business to be anglicised and Americanised. But now that economic power is shifting dramatically away from the US and Europe there is an opportunity to express a much more diverse and multi-cultural point of view. This is particularly apposite given the popularity of cultural relativism.
The USA Coca-Cola-ised the world. Whereas the world, to a large extent, accepted the benefits of American technological and economic expansion. It’s now time to assess this all-pervasive influence.
Why not now express the values and ideas of Gulf, Russian, Chinese, Japanese, Indian, Brazilian societies through corporate reporting?
The solution lies in adopting a two-pronged strategy: adopt standards, language and reporting style for financial reporting, and infuse ESG reporting with a strong and well-expressed cultural framework.
Russian corporates, during the period when the USSR had a planned economy, had a tradition of social responsibility, for example in the area of community engagement and support. They have their own legacy and now current way of discharging their social responsibilities. Gulf corporates also have their own provenance and character based on Islam; this has led to the creation of the Islamic Reporting Initiative.
“International standards often use a vocabulary that is not attuned to local mindsets and modes of thinking and living. That does not make them any less relevant, but it does mean that it is particularly challenging for Islamic organizations to fully embrace these standards without losing sight of Islamic principles and values. Any organization that succeeds in understanding international expectations and in harmonizing them with local culture, will have a key competitive edge” - Dr Sied Sadek, managing director of DQS CFS and DQS Middle East on the trends of CSR reporting in the Islamic world. UNIDO, 2016. Why we need the Islamic Reporting Initiative - UNIDO.
The second half of the twentieth century saw the economic and cultural expansion of the US. Globalisation tended to have an American stamp. Whereas the US remains the world’s economic superpower, corporate and capital power is shifting away from the US and Europe to Russia, the Gulf, India, China, South Korea, Japan and Latin America.
Companies in these fast-growing economies may need to adopt the letter of international reporting but they should couch their non-financial reporting in their own cultural terms.
The best, and most successful, example of this, since 1945, has been the way that Japanese corporate brands have been home-grown, distinctive, deeply-rooted in the host culture, and expressed confidently and monolithically.
While Russian and Gulf corporates should continue to adopt international financial reporting standards they should also develop and promote their brands internationally with energy and confidence and based on their own local cultures. This will give their sustainability and ESG reporting more weight and authenticity, ultimately creating more brand equity.
