Brand, Identity and Reputation: Exploring, Creating New Realities ...

Building Corporate Reputation: A Director‘s Perspective
Chantel Reddiar, University of Pretoria, South Africa
Nicola Kleyn, University of Pretoria, South Africa
Russell Abratt, Nova Southern University, and University of the Witwatersrand
Corporate reputation has evolved into a valuable strategic and intangible corporate asset that directors, as custodians of
corporate reputation, must build and manage as an important source of competitive advantage. The recent global
economic turmoil which began with the onset of firms in the United States of America (―USA‖) being allowed to adopt
untenably risky positions which were unsustainable when financial market positions turned has dealt a blow to the
corporate reputations of many global players (Morris, 2008). As corporate malfeasance and misdeeds have surfaced, the
recent magnitude and frequency of corporate failures, hubris and governance infringements, has resulted in the lowest
recorded levels of trust in corporate USA (Edelman Report, 2009).
Shareholders and society look to the upper echelons of companies, specifically their boards of directors to take
responsibility for the management and building of corporate reputation (Davies, Chun and da Silva 2002; Fombrun
1996). In South Africa, the King III report (IOD, 2009) has specifically mandated the directors of a company to take
formal responsibility for corporate reputation at board level. The purpose of this research is to explore the perspectives
of executive directors to determine their understanding of corporate reputation and their opinions on: the dimensions of
corporate reputation; the value attributed to corporate reputation; their responsibilities as custodians of corporate
reputation and; the manner in which they believe they should build and manage corporate reputation.
Literature Review
Literature was reviewed to develop a comprehensive perspective of the definitions and dimensions of corporate
reputation, the value of corporate reputation, and the role of directors in building and managing corporate reputation.
A detailed review of the literature surfaced a myriad of definitions of corporate reputation. The numerous definitions
have proved problematic in advancing the field of corporate reputation (Fombrun and van Riel (1997; Barnett, Boyle &
Gardberg, 2000; Wartick, 2002; Mahon, 2002; Lewellyn 2002 and Barnett, Jermier and Lafferty 2006).
Literature surveyed also indicated multiple perspectives on the dimensions of corporate reputation (Gabbioneta et al.,
2007; Fombrun and van Reil 2004; Mercer 2004; Gardberg and Fombrun 2006; Carter 2006; Petkova, Rindova, and
Gupta, 2008 and Kim, Bach, and Clelland, 2007). The literature acknowledged that identifying and leveraging the
dimensions of corporate reputation could be of invaluable importance to companies (Gabbioneta et al., 2007). In an
analysis of the various dimensions of corporate reputation Walker (2010) notes that reputation comprises different
dimensions and that these dimensions are issue specific for each stakeholder and/or company. This supports
O‘Callaghan‘s (2007) contention that a one size fits all approach to corporate reputation is not adequate. Despite the
varying perspectives on the dimensions of corporate reputation, authors are unanimous in their views on the importance
of corporate reputation. Gibson, Gonzales and Castanon (2006, p.15) note that ―Reputation is arguably the single most
valued organisational asset‖. This view is supported by Galliard and Louisot (2006), Fang (2005) and Firestein (2006).
Dowling (2006) argues that corporate reputation management is primarily; first and foremost, the responsibility of the
board of directors and that directors that do not deal with reputation management place their companies at risk and
continue to do so until such time as this corporate asset is elevated to board level. The board of directors are tasked with
accountability to shareholders for all aspects of the business (Roberts et al., 2005). Jagt (2005) notes that reputation
management poses one of the major balancing acts in an executive‘s leadership role as directors are required to
perpetually manage the sometimes conflicting interests of multiple stakeholders at the same time.
Building a strong reputation and managing the risk of reputational failure takes careful thought, meticulous planning
and constant work over long periods of time (Larkin 2003). Fombrun and van Riel (2004) advocate for the active
management of corporate reputations in order to derive maximum competitive advantage and to ensure that maximum
value is created for the company. Wiedmann (2002) stresses the need for a companies to adopt a framework to drive an
integrative and purposeful reputation management plan that spans across all areas of the business including finance;
people; resourcing; distribution; and production
Methodology
A qualitative methodology was utilised for the purposes of this study. As the nature of this research was to interpret
phenomena, a partly exploratory, partly descriptive design was employed in order to gain the deep insights sought. Semi
structured, in-depth interviews were conducted with directors of a multi-national company that is listed on the
Johannesburg Stock Exchange. It operates in a highly competitive and specialised industry.
The target firm employs 14 executive directors. The sample size in this study was 12 out of the 14 directors.
Information was collected by means of face to face interviews with each respondent, in the privacy of a board room. A
list of prompting questions was prepared in the form of an interview guide. The data compiled from the interviews were
analysed in accordance with the inductive process and systematic stages outlined by Miles and Huberman (1994), and
further expanded by Hillenbrand and Money (2007, p. 286), which consist of the, ―preparation of written up field notes;
qualitative clustering to identify trends in the data and the further analysis to identify high level themes and links
between clusters.‖
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