Canada

How important is integrity, really?

LON104-Sharapova+Future

This is Monday, March 7, 2016 file photo showing tennis star Maria Sharapova speaking about her failed drug test at the Australia Open during a news conference in Los Angeles.(Damian Dovarganes/AP)

By Caroline Bretsen

May 20, 2016

There is a saying that integrity is about doing the right thing, even if no one is watching.

For companies, the motivation to do right can be viewed from two perspectives. On a base level, it dramatically reduces the risk of a public-relations disaster and long-term financial and reputational impact on account of having done wrong.

However, new research suggests that doing right is less of a means to an end than an end in itself.

The sporting industry and corporate Canada could learn a lesson from that finding. With the French Open set to begin, the public will once again be reminded of the allegations earlier this year that the sport’s integrity police failed to act on suspicions that 16 of the top-50 ranked players were involved in match-fixing. The issue of failing to respond appropriately to cheating has also plagued cricket, horse racing, soccer, NASCAR, college basketball and football – to name a few.

And the plot surrounding cheating in tennis grows thicker with Russian tennis star Maria Sharapova’s failed drug test, which resulted in many corporate brands questioning her integrity and quickly distancing themselves to maintain their own reputations. But that’s the business of sport. Do Canadians have the same level of expectation around integrity in business as they do of the sports world and its athletes?

As it turns out, they do.

In a recent study, FleishmanHillard surveyed Canadians to understand their expectations of companies from 20 different industries and the nine drivers that impact reputation – everything from management behaviours to customer benefits to society outcomes. The weight of expectation varies by industry. For example: Canadians expect banks and airlines to perform consistently; we expect innovation from luxury automotive and consumer electronics; and when it comes to discount retail, fast fashion and grocery stores we want better value. No surprises there.

Where it gets interesting is when we look at the commitment to doing right which, more often than not, Canadians said means being transparent and operating with the highest ethical standards. Doing right is unquestionably a driver of corporate reputation that Canadians hold high across all industries.

Sadly, there is no shortage of high-profile examples where companies or its leaders haven’t operated with the highest integrity.

Volkswagen’s ‘diesel dupe’ uncovered that its engines emitted nitrogen oxide pollutants up to 40 times above allowable limits. The scandal has had devastating effects on Volkswagen’s stock price, which reached an all-time high prior to, but dropped by more than half on the day VW recalled cars, and hasn’t increased much since that time.

According to an independent report that followed former radio host Jian Ghomeshi’s fall from grace, the CBC failed to provide a workplace that was free from disrespectful and abusive behaviour. And most recently, Brazil president Dilma Rousseff has been suspended 180 days while a Senate impeachment trial occurs, for cooking the country’s books.

What’s consistent across all of these examples is that the companies or individuals who misbehaved did so thinking they were exempt from consequence.

For them, it was more profitable to act without integrity than it was to operate with integrity, all the while assuming they were free from accountability. Now under the scrutiny of the full light of day and with the final arbiter, the court of public opinion, a decision will be rendered on the future of these companies and individuals.

So what can we learn from these public debacles? For the companies who have fallen from grace: own up to the issue, apologize, seek solutions and demonstrate that you are accountable for your actions.

For those companies who have their own skeletons yet to be discovered: be true to your values and do right by your employees, customers and other stakeholders. Act with integrity by being transparent and ethical – because even if you think no one is watching – in today’s “always on” world you can be assured that someone somewhere is most certainly paying attention to what you are up to. The price of falling short of expectations is hefty; just ask Volkswagen, the CBC and Dilma Rousseff.

Caroline Bretsen is Senior Vice President with FleishmanHillard, a global communications firm.

 

True

Nick Drew, who leads FleishmanHillard’s research and analytics team in Canada, fashioned these two pieces for the most recent issue of TRUE. “Know Your Audience” is about different POVs globally. “Closing the Gap” offers a broad overview on our POV on authenticity and then some specifics on insights coming out of Canada.

Brand Reputation

Know Your Audience

Closing the Gap Between Brand and Reputation

 

The Authenticity Report – Canada Headlines
2015-2016
Canadian consumers changing expectations of Customer Benefits Expectations of Customer Benefits (better value, customer care, innovation) are down year on year in Canada. Consumers are switching their previously very high expectations of innovation to better value and to a lesser extent customer care. This also holds true for each country studied.

Innovation is now basic expectation of business in Canada Consumers in half of the industries studied rank innovation as their No. 1 expectation. Driven by expectations of technology, innovation in many forms is now expected as the norm in all industries.

Transparent pricing is key to better value in Canada Consumer expectations of better value rank No. 1, 2 or 3 in 18 of 20 industries studied. Close to half of Canadian consumers don’t want to be surprised by hidden costs after purchasing a product or service. How transparent a company is in its pricing is even more important than being cheaper than competitors. Canadian consumers also want products and services recognized by experts as best in class as part of their value equation.

High consumer expectations of Canadian management Expectations of Management Behaviour (doing right, consistent performance, credible communications) are on the rise accounting for 29% of what shapes our perceptions about a company in Canada. In the past, investors and regulators held company management to account; today’s consumers have enough sway to do the same. Executive engagement is critical to meeting rising consumers’ expectations of Management behaviour.

Over half the companies studied fall short, or only just meet, consumers’ expectations of doing right. At a time when it’s more complex than ever for CEOs to do the right thing, Canadian consumers don’t see companies following through. By far the best way for a company to demonstrate its commitment to doing the right thing is to operate its business with the highest ethical standards. To make this stick with consumers they need to operate transparently and stand behind their products.

Canadian companies need to work harder to communicate more frequently and credibly with their stakeholders. Almost half of companies fall short, or only just meet, consumers’ expectations of credible communications. But overall, expectations of credible communications are not highly ranked. Bad experiences may be why expectations are so low, but companies that communicate will find it a competitive advantage. Our previous study showed that in almost all industries, consumers looked for companies to be more open about their processes and practices. Technology was the exception, where people wanted communications that make it easier to resolve issues or problems.

Performance with purpose is not just about the environment Expectations of Society Outcomes are edging up in Canada over last year. This is being driven by increased expectations of employee care and community impact. Expectations of care of the environment actually declined year over year. When companies operating in Canada think of performance with purpose it is important they recognize consumers’ expectations that employee care, community impact and care of environment – in that order – all make up a company’s contribution to Canadian society.

Employee care: companies’ most important contribution to society Consumer expectations of employee care rank the highest of the three drivers that make up Society Outcomes (employee care, community impact, care of environment). Taking care of their employees serves both society and the organization; consumers look to employees as a valued source of information about the company. Employees who feel taken care of can be leveraged to become one of a company’s most important, and most influential, communications channels.

To take care of their employees Canadian companies are expected to offer comprehensive benefits, more than just a pay cheque People expect companies to provide employees comprehensive benefits that take care of lifestyle and offer peace of mind. These benefits packages are believed to be more important to employees than compensation plans that reflect just their market value.

Canadian fans’ perceptions of how well players are treated dictate whether they think a sport is good value or not Whether or not fans think a sport is good value depends on their perception of how well players are paid and cared for – especially contact sports.