Brendan May during his trip highlighting CR in Asia PR Embraces CR Corporate Responsibility (CR) has become increasingly central to the effective management of an organisation’s reputation. Fuelled in part by Asia’s growth trajectory, clients in this region are now looking closely at how they can establish clarity around their own CR activity. Earlier this year Brendan May, Weber Shandwick’s international head of corporate responsibility and sustainability, delivered a series of client briefings and workshops to introduce Weber Shandwick’s CR service offering in the region. In this issue, In Touch asks two Asia Pacific professionals who regularly engage in CR campaigns—Ken Hong, managing director of Weber Shandwick Thailand, and Brad Jaffe, vice president at Powell Tate Beijing—for their expert opinion about how PR can embrace CR. Ken Hong, managing director of Weber Shandwick Thailand In what ways can CR enhance a public relations campaign? Hong: CR is a reputation enhancer. If done correctly and creatively, it can make the difference between a thought leader and a “me too” follower. Almost every client can benefit from a well thought-out CR strategy, but not every client will benefit to the same degree. In every case I have seen, the companies that have the best CR strategies are the ones who truly believe in the cause. Jaffe: CR is sustainable and workable at the communications level only if there is a long-term commitment on the part of a company’s leadership and if it is aligned with a company’s strategic objectives. “CR programmes” should be viewed as just one part of an ongoing corporate reputation campaign, including issues and crisis management, public affairs, government relations and PR.   What are the challenges of pitching a campaign concept that includes CR? Hong: The biggest challenge in Asia is managing expectations about a one-off CR programme. It is neither a panacea for a company’s less-than-spectacular reputation nor will it provide months of cheap publicity. And rarely is a good CR programme cheap. PR practitioners have to communicate clearly that CR is a long-term investment. Jaffe: Only substantive activities should be considered newsworthy, and companies have suffered for trying to make positive news out of less-than-positive realities. So smart PR professionals must ask: Does the company have a legitimately newsworthy activity? Is the activity strategically aligned with the company’s business objectives? Is it credible? Measurable? Can trustworthy third parties advocate on the company’s behalf? In other words, is it real? The key lesson here is first to be responsible, second validate it, and then talk about it. Does CR have a business benefit for our clients? Brad Jaffe, vice president at Powell Tate Beijing Hong: The business benefit is definitely there in the long run but clients should pursue CR for reasons that are deeper than the bottom line. There are also the benefits of customer loyalty, employee pride, higher quality, reduced regulatory oversight and at the most basic level, keeping up with the Joneses … or the Wangs! Jaffe: Weber Shandwick’s recent Safeguarding Reputation™ survey reveals that in Asia, 63% of a company’s value is attributable to its reputation. But the real bottom-line is that responsible behaviour is simply good business. Not only are consumers increasingly interested to know that a company is behaving responsibly, it also is the case that behaving responsibly can save a company a lot of money, e.g. energy use, environmental clean-up, supply-chain efficiencies, lawsuits and more.

	Study Shows Asia Pacific CEO Turnover Still World’s Highest

Leslie Gaines-Ross, chief reputation strategist

The turnover rate for Asia Pacific CEOs among the 500 largest revenue-producing global companies remains significantly higher when compared with their European and North American counterparts, according to Weber Shandwick’s CEO Departures™ study.

In the first three quarters of 2007, 20 CEOs from the 122 Asia Pacific companies ranked in the global Fortune 500, left their jobs. This represents a 16.4% turnover rate, compared with 15.5% in the previous year.

In contrast, the turnover rate for top North America CEOs was less than half the Asia Pacific rate, at 6.7% (versus 8.7% the year before); and despite a sharp rise in Europe to 12.6% (from 9.3% in 2006), the Asia Pacific rate was still higher than that for European CEOs.

“These statistics reveal a growing disparity between North American and European/Asia Pacific CEO tenures. While North American CEOs appear to be enjoying somewhat more job security than ever before, European CEOs in particular are now facing greater pressure to perform or pay the price,” said Dr. Leslie Gaines-Ross, Weber Shandwick’s chief reputation strategist and leading CEO reputation expert. “Despite regional differences, the fact remains that the chief executive position remains a treacherous one when you consider that over 10% of the world’s largest companies lost their CEOs in the first three quarters of 2007. This departure rate amounts to a CEO departure among the world’s largest-revenue producing companies nearly every five days.”

Trends in the Corner Suite
Weber Shandwick’s analysis identified several other significant changes in the global chief executive suite:

• Deciding to leave in Q4? – 2007 saw more chief executives exit during the first quarter than the following two quarters (26 vs. 15 vs. 16, respectively) and when compared to the first quarter of 2006 (26 vs. 16, respectively). As the global economy faces greater upheaval this year, the fourth quarter of 2007 and the first quarter of 2008 should continue to witness high rates of CEO departures. The last quarter of 2006 had 22 CEO departures leading into the first quarter of 2007 with 26 CEO departures. Global boards are clearly trying to use the end and start of the year to clean house and get the bad news out as soon as possible before the year unfolds.

• Ousted CEOs Rising – Overall, 28% of chief executives who left office in the first three quarters of 2007 exited involuntarily. In Asia Pacific, CEOs buck this trend with the number of ousted CEOs halving in 2007. European CEOs were also more likely to be pressured to leave their jobs than their regional counterparts. While only two European CEOs were forced out of office by the end of the third quarter in 2006, nine European CEOs exited involuntarily during the same time period in 2007.

• Insider CEOs Outpace Outsider CEOs – For the first three quarters of 2006 and 2007, insider executives continued to outnumber outsider executives when new CEOs were selected to lead the world’s largest companies. Interestingly, 2007 had an even greater proportion of insider CEO successions than seen in 2006 (70 vs. 64% respectively).

“Continued CEO turnover among the largest companies in the world, coupled with an uncertain economy, could signal trouble ahead. Regardless of region, CEOs now face unprecedented scrutiny with little flexibility or forgiveness,” said Weber Shandwick President Andy Polansky. “To avoid surprises, it is imperative that companies not only perform well but also effectively communicate with their key shareholders, boards, employees, media and other stakeholders as transparently as possible.”

About CEO Departures™
Weber Shandwick’s CEO Departures study is based on an analysis of the global Fortune 500 companies. For purposes of the study:

• Insider CEOs are defined as executives who have worked for the company for three or more years before being announced as the new CEO.

• Outsider CEOs are defined as executives who either have never worked for the company or been employed by the company for less than three years before being announced as the new CEO.

	Travel Communications in China by Bill Wu