Global Survey Finds That Companies Should Bear Greater Responsibility for Addressing Societal Problems

New York, November 13, 2007 - Corporations have a growing responsibility to go beyond their traditional roles to help solve global social problems, including improving water and air quality, reducing poverty, and increasing access to adequate healthcare, according to a global study of the roles and responsibilities of corporations and CEOs conducted by global public relations agency Ketchum.

The study also finds that respondents do not believe corporations are meeting some of these broadened expectations, falling short as environmental stewards and failing to measure up in honesty and ethics. In addition, there is distrust of CEOs because a substantial portion of the public does not believe that corporate leaders balance integrity and open communication with business and financial performance. And most respondents – with the exception of those in developing markets – would not want to be a CEO.

           

The study polled some 2,750 influential citizens in 11 countries. Influential citizens are defined in the study as the 10% to 15% of the population who initiate changes in their community or society through a variety of activities. They do not include elected officials.

 

“Ketchum commissioned the study to explore the expectations influential citizens have of corporations and CEOs,” said John Weckenmann, Director, North American Corporate Practice, Ketchum. “The study points to a somewhat ironic set of findings. While citizens have a low level of trust in all institutions, especially corporations, they also believe that these same companies can and should address a range of societal issues. Their apparent disillusionment with corporations does not dim their expectations that companies and their leaders have the skills and resources to help improve the world today.”

           

In the U.S., the U.K., Canada and Germany, for example, respondents think that corporations have as much responsibility as governments in preventing global warming. Expectations of corporations are also high in improving water and air quality and in mitigating poverty. U.S. respondents feel that companies have a significant obligation to provide access to adequate healthcare. 

 

Trust in institutions generally—corporations, major media, religious institutions, government and nongovernmental organizations (NGOs)—is low. Corporations have the lowest scores.

           

Overall trust of institutions and their leaders is lowest in developed countries, with corporations, governments and NGOs falling below major media and religious institutions. However the developing nations of Brazil, China and India showed the greatest levels of trust in institutions, led by major media, corporations and NGOs.

           

In addition to gauging citizens’ trust of corporations and CEOs relative to other institutions, the study also measures the following:

Among the findings in the main survey categories are the following:

 

On a worldwide basis, the survey shows that influentials expect corporations to be good environmental stewards, act honestly and ethically, and place people—in the form of fair employee compensation, consumer care, and community responsibility—ahead of profits.

           

Respondents in most European nations say that corporations should focus more attention on environmental protection, while those in North America and the developing nations—India, China and Argentina—attach approximately equal significance to environmental issues and profits.

           

On a worldwide basis, environmental stewardship is the area where the gap between expectations and performance is the greatest, followed closely by honesty and ethics. Expectations and performance are more closely aligned in the more traditional business areas of generating profits, creating shareholder value and innovation.

 

In general, the study acknowledges the significance of—and gives CEOs high marks for—the traditional areas of business management. At the same time, influentials believe that honesty, ethics and fairness are among the most important personal characteristics for a CEO but the ones that are least often fulfilled. In addition, the study identifies employee relations and communication as CEO weak spots that need improvement.

           

Trust in what the leaders of corporations say is generally as low or lower than the level of trust influentials have in the institution itself, with the U.K., Canada, Germany and the U.S. giving the lowest marks to CEOs for being ethical.

           

Among the traditional business strengths that influentials look for in a CEO, strong financial management and building a strong management team top the list.

           

On the subject of CEO compensation, respondents agree that CEO compensation is a significant concern and impacts how they view companies. But influentials in developed countries say CEO pay is too high and they would not want the CEO’s job, while those in developing nations feel CEOs are paid appropriately and would welcome the opportunity to run a company. The percentage of influentials saying they would want to be a CEO ranged from a high of 84% in India to a low of 33% in Germany.

 

Faced with a series of choices, influentials in the U.S. favor positions that protect local employment and enhance employee benefits. For example, they prefer the following:

But outside the U.S., Canada and Germany, the trade-offs often favor a commitment to research and development. For example, influentials prefer the following:

A communications innovator, Ketchum ranks among the largest global public relations agencies, operating in more than 50 countries. With five global practices – Brand Marketing, Corporate, Healthcare, Food and Nutrition, and Technology – and specialty areas that include Concentric Communications (experiential marketing, events and meetings), Ketchum Entertainment Marketing, Ketchum Global Research, Ketchum Sports Network, Stromberg Consulting (change management and workplace communications) and The Washington Group (lobbying and government relations), Ketchum leverages its marketing and corporate communications expertise to build brands and reputations for clients. For more information on Ketchum, a unit of Omnicom Group Inc. (NYSE:OMC), visit www.ketchum.com.