News archives September 2002 South's business reputations at risk from "short-termism" Nine out of ten business leaders, including many in the South, believe that managing their companies' corporate reputation is a boardroom issue, especially during times of economic downturn and business upheaval, but their measures are mostly short-term and financially driven. That's a key result of major research conducted by the Public Relations Consultants Association (PRCA). Extensive telephone interviews with over 100 CEOs and senior general management of top UK businesses found that share price (31%) and profits (27%) head the list of most important factors believed to contribute to a company's corporate reputation. These are well ahead of consistent performance (3%), performance in line with expectations (3%) and a strong balance sheet (2%). This focus on headline financial indicators is unsurprising because the average CEO of a UK listed company is in office for only 2.75 years. Commenting, PRCA Vice Chairman Dr Tom Watson says, "Businesses in the South have a very positive understanding of the role of public relations in developing and maintaining corporate reputations. In many facets, they the lead the UK." Tom, who is managing director of Winchester-based Hallmark PR, advised that CEOs need to resist financial market short-termism and to develop the medium to long-term strategies necessary to manage and develop this critical business asset. In measuring corporate reputation, southern business rate sales performance more highly than those in London, the Midlands, North and Scotland. However, they are lowest on use of market research and survey. When seeking advice on corporate reputation, southern business are most likely to turn to public relations consultants, followed by accountants, lawyers and fellow board members. They are the least likely to turn to management consultants and marketing consultants. In most UK companies, the CEO has the ultimate responsibility for public relations. In the South the CEO's leadership is the highest of all the regions and companies in the South are also leading the country in ranking "public relations as the single most important activity in developing and sustaining corporate reputation". Despite the economic and stock market downturns of recent months, the South's business leaders are least likely to cut PR budgets and most likely to keep them at the same level as last year. Some 24% say they have increased spending. Apart from the short-termism of financial measures of corporate reputation, one of the negative messages from the PRCA survey is that 68% of respondents from the South have not done a crisis review since September 11 last year. That put them on top of the national rankings, compared with the Midlands, North and Scotland (52%) and London (50%). For further information contact Steve Wilson