Corporate Reputation, Leadership, and the High-Risk Gamble of Ignoring Stakeholder Trust

As global tensions escalate and technological disruption deepens, corporate leaders are increasingly aware that intangible assets like reputation, corporate purpose, and sustainability are vital for navigating uncertainty. The Approaching the Future 2024 - (ATF) 2024: Trends in Reputation and Intangible Asset Management report released by the Global Alliance as part of Global Public Relations and Communication Month, makes this abundantly clear, stressing the strategic importance of these intangibles for long-term success. Yet, despite this shift, some CEOs and boards continue to take reckless risks—cutting corners on sustainability, dodging transparency, and assuming they can outsmart their stakeholders without retribution. These gambles are likely to backfire, especially as communicators are holding their profession to account, as they take on a crucial role as internal influencers, shaping the very decisions that will define corporate futures.

Reputation: A Fragile Asset in the Crosshairs of Risk

The Approaching the Future 2024 report highlights corporate reputation as the most important intangible asset, with 61.3% of professionals identifying it as key to their organisation’s success. This increased focus on reputation reflects a wider understanding: in today’s hyper-connected world, missteps are magnified and long-term brand loyalty hinges on trust. But not every organisation is taking this seriously. Some CEOs continue to play a risky game, calculating that they can prioritise short-term profit over reputational integrity and avoid the consequences.

Take the fast-fashion industry, for instance. Many brands have been criticised for perpetuating environmental degradation and unethical labour practices, all while flooding the market with new collections to capitalise on consumer demand. They believe that by ramping up marketing efforts and keeping prices low, they can sidestep the deeper reputational damage. But the report warns of the long-term consequences. As consumers become more socially conscious and vocal on platforms like social media, the ability to avoid public scrutiny diminishes. These companies may enjoy temporary profits, but the fallout—lost customer loyalty, plummeting investor confidence—will eventually take its toll.

In the tech sector, we see similar risk-taking. Despite repeated privacy scandals, companies like Facebook and TikTok have placed short-term data exploitation above long-term trust, banking on their platforms’ ubiquity to weather the storm. In Australia, the Optus and Medibank data breaches have shaken public confidence, with customers left questioning the integrity of the corporations they once trusted. The risks are ever increasing, and company’s leaders must prioritise these real-world risks. The report makes it clear: as digitalisation expands, companies must treat data privacy as a cornerstone of their reputation. Failing to do so opens the door to long-lasting reputational damage that no PR crisis team can fully remedy.

Leadership: Calculated Risks or Catastrophic Missteps?

The report underscores responsible leadership as the second most important trend, with 60.7% of professionals recognising its critical role. Yet, paradoxically, we continue to see high-profile examples of CEOs and boards prioritising short-term shareholder returns over long-term responsibility. Consider BP’s recent decision to scale back its climate commitments. Despite public commitments to net-zero emissions, the company chose to pivot under the guise of “economic pressures,” signalling to investors that profit trumps sustainability. This kind of leadership gamble ignores the growing importance of corporate responsibility in the eyes of consumers and stakeholders.

Such actions send a message that undermines years of reputational capital. As the Approaching the Future report shows, organisations that embrace responsible leadership, focused on sustainable practices and stakeholder engagement, are better positioned to weather both crises and change. Leaders who gamble on short-term gains risk alienating not only consumers but also the growing cohort of investors who now see ESG (Environmental, Social, and Governance) performance as a decisive factor in investment decisions. The irony is that while these risk-takers hope to sidestep public scrutiny, they are, in fact, moving into the spotlight—setting themselves up for long-term reputational collapse.

Communicators as Internal Influencers and Guardians of Trust

Against this backdrop, the role of corporate communicators has never been more pivotal. The Approaching the Future 2024 report stresses that corporate communication remains the area where companies invest the most resources, with 54.3% prioritising it. Yet, this is not just about external messaging; it’s about how communication professionals are now key internal influencers, guiding the decisions of CEOs and boards. Communicators are uniquely positioned to be the bridge between corporate strategy and stakeholder expectations. In fact, they are increasingly becoming trusted senior advisers, ensuring that leadership remains aligned with corporate purpose and public trust.

This shift is reinforced by the Global Alliance for Public Relations and Communication Management’s Responsible Communicator Commitment, a key initiative that aligns with the United Nations’ Sustainable Development Goals. Under this framework, communicators are tasked with fostering transparency, advocating for ethical leadership, and ensuring that companies uphold their commitments to sustainability and social responsibility. As internal influencers, they now have a seat at the decision-making table, where they can challenge risky strategies that ignore stakeholder trust.

The Global Alliance's commitment pushes communicators to move beyond just managing reputational damage; they are the architects of the narrative that binds an organisation's actions to its values. This commitment is crucial as companies grapple with emerging challenges like AI, which is rapidly transforming industries but also raising ethical concerns. The report notes that nearly 30% of companies are investing in AI, but only 24.9% are dedicating resources to ensuring its ethical use. Here, communicators must act as the conscience of the C-suite, advising leaders on the reputational risks of mishandling AI and other innovations that could undermine public trust.

Risking Customer Relationships: A Fool’s Errand

Perhaps the most dangerous gamble is the one that assumes customers are easily fooled. Some CEOs and boards believe they can mislead or manipulate public opinion, skirting the consequences of unethical practices. The Approaching the Future report demonstrates the folly of this thinking. Customers today are more informed and engaged than ever before. Attempts to "greenwash" corporate behaviour or push unsustainable products are met with fierce backlash, as seen in the growing consumer boycotts and the rise of ethical investing.

A cautionary tale lies in the destruction of Juukan Gorge by Rio Tinto in 2020. Despite high-level apologies and executive resignations, the damage to the company’s relationships with Indigenous communities and environmentally conscious investors lingers. The reputational cost is not something Rio Tinto can afford to ignore, and yet, it serves as a prime example of what happens when corporations assume they can outmanoeuvre their stakeholders. As the report highlights, customers are not passive observers—they are active participants in holding companies accountable.

Sustainability and ESG: Not Just a PR Exercise

Sustainability and ESG continue to climb in importance, with 70.3% of large companies prioritising sustainability in 2024. Yet, some corporations continue to treat these commitments as mere PR exercises, rather than as integral to their business models. The banking sector is notorious for this, with many institutions touting their "green" credentials while continuing to fund fossil fuel projects. The Approaching the Future report makes it clear that this approach will not suffice. Investors and customers alike are increasingly savvy to "greenwashing" and will hold companies to account.

Failure to integrate genuine sustainability practices poses a long-term risk, not just to reputation but to financial viability. The report signals that superficial adherence to ESG principles will no longer shield companies from scrutiny. As global regulations tighten and climate crises escalate, the corporations that embed sustainability into their core strategy will be the ones that survive. Communicators, again, are at the forefront of ensuring that these strategies are not just words but actions, pushing leadership to align public commitments with genuine corporate transformation.

Outmanoeuvring Stakeholders is a Myth

The Approaching the Future 2024 report is a stark warning: companies that gamble with their reputation, ignore stakeholder trust, or treat sustainability as an afterthought are walking a perilous path. CEOs and boards may believe they can manipulate public opinion, but today’s consumers and investors are too informed, too engaged, and too empowered to be fooled. Communicators, as internal advisers, must continue to advocate for transparency, responsible leadership, and long-term strategies that align with corporate purpose and societal expectations. In a world where trust is more fragile than ever, those who play high-stakes games with their reputation will almost certainly lose.

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