Actions Speak Louder than Words: CEO Apologies Losing Potency in Times of Crisis and Reputation Recovery

Actions Speak Louder than Words: CEO Apologies Losing Potency in Times of Crisis and Reputation Recovery

October 26, 2006

Nearly 40% Choose to Avoid Responding to Bloggers
Only 20% Recommend Keeping CEO Invisible Post-Crisis

    NEW YORK, Oct. 26 /Xinhua-PRNewswire/ -- Global
business executives view public CEO apologies less
effective than other strategies to repair tarnished company
reputations (59 percent), according to a new 11-country
survey by global public relations firm Weber Shandwick and
KRC Research.

    "CEO apologies are quickly losing their power to
allay public concern now that they are almost expected when
a crisis strikes or companies are accused of
wrongdoing," said Weber Shandwick's Chief Reputation
Strategist Dr. Leslie Gaines-Ross, architect of the new
research.  "Taking responsibility by apologizing is
important, but more is expected from CEOs in crisis such as
greater public outreach on what the company intends to do
about the problem on an immediate and regular basis."


    According to nearly three-quarters of the 950 global
business leaders participating in the "Safeguarding
Reputation(TM)" survey, the best steps to beginning
the reputation recovery process are announcing specific
actions the company will take to fix the problem (76
percent), creating an early warning system (76 percent),
and establishing procedures and policies the company will
follow to demonstrate its commitment to being a responsible
citizen (73 percent).  Other frequently mentioned strategies
for repairing post-crisis reputation are working closely
with legal counsel on public disclosures (72 percent),
issuing regular public progress reports to address the
problem (71 percent) and quickly and publicly disclosing
what happened (71 percent).  Many of these action steps
help stem hyper-media coverage as stakeholders are assured
that the company is being as transparent and proactive as
possible under the circumstances.

    To Respond or Not to Respond to Bloggers

    The majority of global business executives agree that
responding to bloggers post-crisis is not an effective way
to begin the recovery process, regardless of region.  Less
than four in 10 (39 percent) believe that engaging with
bloggers who may have the facts wrong is a good idea in
rebuilding lost reputation.  "Perhaps business
decision-makers around the globe believe that companies
should concentrate on fixing the problem and understanding
what went wrong before turning their attention to
correcting online conversations," said Dr.
Gaines-Ross. "This is not surprising since our
research also reveals that only a minority of companies pay
attention to online coverage of their company's
reputation."

     Steps to Help Companies Recover Reputation after
Crisis Strikes 
                           % Always/Usually

                                                 North     
       Asia-
                                        Total    America 
Europe  Pacific 
    Announce specific actions company 
     will take to fix the problem         76%      83%     
73%      78% 
    Establish early warning system        76       83      
69       82 
    Establish specific policies and 
     goals demonstrating corporate
     responsibility                        73       75     
 69       74 
    Make sure legal team approves all 
     statements                            72       74     
 68       76 
    Issue regular public progress reports 
     addressing the problem                71       78     
 69       70 
    Disclose quickly and publicly what 
     happened                              71       73     
 72       70 
    Determine if problem is industry-wide 
     or limited to the company before 
     acting                                67       60     
 68       62 
    Provide public apology from CEO or 
     Chairman                              59       57     
 57       64 
    Achieve quarterly earnings goals       57       50     
 59       47 
     Create senior position with specific 
     responsibility for managing company 
     reputation                            47       45     
 50       42 
    Avoid any public communications until 
     all facts are in                      45       46     
 39       46 
    Respond to bloggers who have facts 
     wrong                                 39       31     
 40       41 
    Restructure or eliminate board 
     members                               26       14     
 27       21 
    Keep the CEO out of the media          20       16     
 21       17 

    Source: Weber Shandwick Safeguarding Reputation(TM)
conducted with KRC Research, 2006 

    Keeping CEO Invisible after Crisis Strikes Not
Advisable

    Only one out of every five global business executives
(20 percent) believe that keeping the CEO out of the media
after a crisis helps restore reputation.

    "CEOs are the public face of their organization
and in times of turmoil are expected to be visible and
forthright about any problems that arise on their
watch," said Dr. Gaines-Ross. "In addition to
straightforward CEO communications, companies can begin
restoring equity in their company name by publicly stating
problem-solving actions, making crisis preparedness a
priority and setting clear responsibility standards."

    New Rules of Engagement

    "Leaders need to better understand the rules of
engagement as they increasingly find themselves in the
spotlight for wrongdoing or mounting crises.  Considering
that nearly nine out of 10 global business executives see
an increasing trend in damage to corporate reputations, it
is wise to identify the best recovery strategies now,"
said Weber Shandwick President Andy Polansky. 

    "Interestingly, the survey reveals that despite
vastly different business practices, cultures and work
styles, leaders share a global perspective on reputation
recovery following a crisis," said Polansky. 
"Our groundbreaking research offers insights into how
companies can safeguard and repair their reputations,
identify the early warning signs of reputation failure, and
take the right steps to reputation recovery." 

    Safeguarding Reputation(TM)

    Safeguarding Reputation was conducted by Weber
Shandwick in partnership with KRC Research among 950 global
business executives in 11 countries spanning North America,
Europe and Asia-Pacific. Brazil was the only Latin American
country participating in the survey. All interviews were
conducted by telephone between July 20 and August 8, 2006.
The sampling error for the total sample is +/- 3.2
percentage points.

    About Weber Shandwick

    Weber Shandwick is one of the world's leading global
public relations firms with offices in major media,
business and government capitals around the world. The firm
specializes in strategic marketing communications, media
relations programs, public affairs and issues management,
reputation management, and provides corporate
communications counseling.  Weber Shandwick also provides
specialized integrated services including Web relations,
advocacy advertising, market research and visual
communications.  Find out more at
http://www.webershandwick.com .

    Weber Shandwick is a unit of The Interpublic Group of
Companies (NYSE: IPG), which is among the world's largest
advertising and marketing services organizations.

    About KRC Research

    KRC Research is a full service market and attitudinal
research firm.  Research partner to Weber Shandwick and
other Interpublic Group agencies, KRC specializes in
strategic communications research, including research to
support product communications, corporate communications,
public affairs, and social marketing.  KRC provides a full
range of primary research services, including surveys,
focus groups, and executive interviewing.  Find out more at
http://www.krcresearch.com .

    For more information, please contact:

    Laura Bachrach
    Weber Shandwick
    Tel:   [phone]
    Email: [e-mail]

SOURCE  Weber Shandwick