Operating in the general public's good faith is an ongoing challenge for many of the country's public companies. However, this is not the only group people with whom they need to remain transparent and honest.
For publicly traded companies, there are a range of groups whose opinions enterprise decision makers need to consider when making important changes or announcements. These include both the general public, existing shareholders and prospective investors, as negative news can shake confidence among any of these groups.
Due to these vested interests, it's important that corporate affairs strategies build trust among individuals.
What impacts the public's trust?
A recent investigation from Roy Morgan Research sought to identify the professions that are highly regarded by the general public. While nurses retained their usual spot at the top of the chart, the organisation discovered that business leaders aren't always considered the most trustworthy people.
According to the results, directors of public companies and business executives ranked at No. 18 and No. 20 respectively. The results are important for businesses considering the most effective way to communicate messages either to the general public or to shareholders, as the chosen spokesperson could greatly affect how the information is received.
How quickly does new information spread?
Information, whether positive or negative, can spread extremely quickly, especially through larger groups of people. If corporate communications aren't received favourably due to the nature of the content or because of the person who distributed the information, it can become a reputational risk management concern.
The Association for Psychological Science described information as "contagious" in a recent report. According to researchers, both large and small groups are equally receptive to common information which can spread quickly among individual members.
The study also revealed that, as the size of a group increases, the individuals within that segment are able to remember certain facts much more reliably. This can be either a blessing or a curse depending on how well the public responds to specific communication.
Public scandals force corporate rethink
Ernst & Young's (EY) recent report on Australia's financial sector found that public scandals often result in the involved organisation's executives increasing their attention on risk.
According to the consultancy, many banks and other institutions around the country are reviewing their accountability standards. As Roy Morgan Research reported that Bank Managers and Accountants are fairly well-respected by the public, these revised standards should allow them to continue operating in good faith.
Promoting trust in the general public and shareholders can be a challenge for businesses, with the perception of certain professions and the rapid spread of information having a notable impact on corporate reputations.