"Influential" Citizens Say Corporations Should Do More to Tackle the World's Woes



    Global Study Paints Picture of Unmet Expectations

    TORONTO, Nov. 13 /CNW/ - Corporations have a growing responsibility to
help solve major social problems, such as dirty air and water, poverty, and
access to adequate healthcare, according to an international study of the
roles and responsibilities of corporations and CEOs conducted by global public
relations agency Ketchum.
    Most of those surveyed in Canada and 10 other countries said corporations
aren't meeting many of these broader expectations, falling short as
environmental stewards and failing to measure up in honesty and ethics.
    The survey also revealed that while honesty, ethics and fairness are seen
as the most important personal characteristics for a CEO, they are the ones
that seem to be least often fulfilled. Canada, the U.K., Germany and the
United States gave the lowest marks to CEOs for being ethical, and 62 per cent
of Canadian influentials said they wouldn't want to be a CEO of a large
corporation.
    The researchers, who polled 2,750 "influential citizens" across the
11 countries, defined those citizens as the 10 to 15 per cent of the
population who initiate changes in their community or society through a
variety of activities. They do not include elected officials.
    "This was really an eye-opening piece of research," said Geoffrey Rowan,
Managing Director of Ketchum Public Relations Canada. "The level of mistrust
for institutions, the frustration with business leaders, and at the same time
the expectation that corporations can and should be doing a lot more than just
building shareholder value is both a threat but it's also a remarkable
opportunity."
    For Canadians, as well as those from most other countries in the survey,
there are huge gaps between the expected behaviour of corporations and the way
they are actually perceived to be behaving. For example, 90 per cent of
Canadians said following ethical standards is important, but only 14 per cent
are confident that it's being done. Among the influentials, 87 per cent said
communicating honestly is important, but only 11 per cent believe corporations
do that. The only area where corporations met expectations was in generating
profits.
    While the study focused on corporations and CEOs, it also provides a view
of society's trust - and mistrust - of its important institutions. The good
news for major Canadian media outlets and religious institutions is that they
were cited as the most trustworthy; the bad news is that they were leaders
with very low numbers. Only 18 per cent find major media trustworthy, versus
15 per cent who were openly distrustful. (The rest fell in a middle ground.)
The story was worse for religious institutions, where only 17 per cent gave an
unambiguous vote of trust, compared to 33 per cent who said they do not trust
them.
    Governments and Non-Governmental Organizations fared the worst in the
trust rankings, with just 10 per cent saying they trusted each while
30 per cent said they did not.
    "The study points to a somewhat ironic set of findings," said
John Weckenmann, Director of Ketchum's North American Corporate Practice.
"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 addition to gauging citizens' trust of corporations and CEOs relative
to other institutions, the study also:

    
    -   Identifies the expectations influential citizens have for
        corporations and benchmarks actual corporate performance against
        these expectations;
    -   Determines the elements that distinguish well-regarded CEOs; and
    -   Further defines influentials' preferences on key issues through a
        series of tradeoff choices.
    

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

    Expectations

    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.

    CEOs

    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 as or
lower than the level of trust influentials have in the institution itself,
with the U.K., Canada, Germany and the United States 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. Three of
four Canadians said CEOs are overpaid.

    Tradeoffs

    Faced with a series of choices, influentials in North America favour
positions that protect local employment and enhance employee benefits. For
example, they prefer to:

    
    -   Increase consumer prices by 15 per cent rather than move operations
        to a location where wages are lower;
    -   Give employees a 10 per cent pay increase rather than contribute to
        local schools; and
    -   See the value of a stock drop 10 per cent rather than lay off 10 per
        cent of the workforce.

    But outside Canada, the U.S. and Germany, the tradeoffs often favour a
commitment to research and development. For example, influentials prefer to:
    -   Increase R&D spending rather than enhance the performance of a public
        pension fund;
    -   Invest in new technology to increase gas mileage rather than provide
        healthcare benefits to retirees; and
    -   Increase R&D spending to create new jobs rather than improve health
        benefits for current employees.
    

    About Ketchum

    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.





For further information:

For further information: or to schedule an interview, please contact:
Lindsey Coulter, Account Executive, Ketchum Public Relations Canada, Tel:
(416) 355-7430, Lindsey.coulter@ketchum.com

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