The chief executives of Facebook, Amazon and Google have taken a hit to their reputations in the past year, and the results are linked to the growing importance of ethical behaviour in perceptions of both companies and their leaders, a new survey has found.
The Boston-based Reputation Institute surveyed 230,000 people across 15 countries, including Canada. It asked people for input only on companies and CEOs with which they are very familiar. It asked people to measure CEOs’ reputations based on four major criteria: leadership (which includes such components as their strategic vision for the business), management skills (including the ability to generate value for stakeholders and managing people effectively), influence (such as communications skills) and responsibility.
The last consideration has to do with whether they are perceived as acting ethically and caring about social causes. And for the second year in a row, responsibility was a big driver in determining CEO reputation in the study, known as CEO RepTrak 2019.
“It’s a combination of environmental responsibility, social responsibility and fiscal responsibility,” Stephen Hahn-Griffiths, chief reputation officer at the research firm, said in an interview. “You can’t just do the right thing and run the company into the ground. At the same time, you can’t just be fiscally responsible and care about the profits of the company, without taking into consideration that people need to be treated fairly; you’ve got to do right by the environment, and a bigger social agenda. It’s a balance.”
Google LLC, which operates as a subsidiary of Alphabet Inc., has faced an antitrust investigation in the European Union and questions about its commitment to data privacy and gender pay equity. It has also attracted notice for public walkouts by employees around the world protesting its policy on sexual harassment in the workplace.
Such social issues are becoming more important in how companies and their leaders are evaluated. In last year’s study, Google CEO Sundar Pichai was ranked No. 1 in terms of reputation. This year, he fell out of the Top 10 altogether, landing at No. 88.
Mr. Pichai has been making an effort to address some of those concerns, announcing an overhaul of the harassment policy last November and more recently announcing new controls people could use to limit how much data they share with the company. Privacy is a delicate balance for Google, an advertising behemoth that has earned billions of dollars by gathering data across its suite of digital services in order to offer more targeted ads.
Facebook Inc. has faced questions about how long its top executives were aware of risks to data privacy that were exposed by the Cambridge Analytica scandal. The company has also come under fire for initially deflecting questions about its role in spreading misinformation. CEO Mark Zuckerberg’s reputation fell “precipitously,” Mr. Hahn-Griffiths said, with responsibility being the biggest driver of the decline.
Amazon Inc. CEO Jeff Bezos was also affected by lower responsibility scores that drove his rating down, because of a lack of perception as a “caring CEO,” both in terms of larger social causes and company employees more specifically.
As a result, this year both Mr. Bezos (ranked at 46 in 2018) and Mr. Zuckerberg (previously at No. 53) failed to make the CEO RepTrak’s Top 100.
“To help keep people safe and to strengthen our platform against abuse, we’ve made fundamental changes to how we work across the company and we’ve made significant investments in people, partnerships and technology,” Facebook spokesperson Erin Taylor said in an e-mail, and pointed to a recent blog post explaining some of the steps the company is taking to address issues such as misinformation, election interference, and personal data and privacy protection.
A Google spokesperson declined to comment on the findings. Amazon did not immediately respond to a request for comment.
The Top 10 this year consisted of the CEOs of Danone SA, Dell Inc., Deutsche Luftansa AG, Estée Lauder Cos. Inc., Hilton Worldwide Holdings Inc., ING Groep NV, Lego System A/S, Mary Kay Inc., Nintendo Co. Ltd. and Royal Dutch Shell PLC. (Because there is little statistical difference in the scores of the Top 10 CEOs, the report declined to rank them in any particular order.)
CEO perception matters because it is directly linked to a company’s reputation, which can affect performance. The study found that when people are both familiar with a CEO and view the executive favourably, their likelihood to purchase and recommend the company’s products or services went up by 19 per cent.