Corporate Reputation Watch Prepared for Research conducted by October, 2003 Summary of Findings and.

Corporate Reputation WatchCorporate Reputation Watch

Prepared for

Research conducted by

October, 2003

Summary of FindingsSummary of Findings

and

http://www.kornferry.com/Library/Process.asp?P=Home

2

Table of ContentsTable of Contents

Executive Summary .............................................................................................. 2

Research Objectives and Design.......................................................................... 4

Corporate Reputation............................................................................................ 7

Corporate Social Responsibility .......................................................................... 17

Corporate Governance ....................................................................................... 21

Appendix ............................................................................................................. 27

Executive SummaryExecutive Summary

Founded 1938An Opinion Research Corporation Company

4

Corporate reputation is being managed from a strategic perspective CEOs believe that Corporate Reputation is more important today than ever and evidence of its

importance include (p.8) – most place the responsibility for managing corporate reputation on themselves (p.15) reputation of a candidate’s company strongly impacts hiring decision (p.14) great deal of weight placed on CEO by Board to protect and enhance reputation (p.13)

The primary objective achieved by reputation is to promote relationships, those with employees and business partners (p.9)

Drivers of Reputation CEOs point to customers as having the greatest external effect on corporate reputation (p.11) European CEOs acknowledge the importance of communications on reputational issues and the

influence of print media (p.10, 11)

Corporate Social Responsibility CEOs believe that corporate social responsibility initiatives contribute at least moderately to

corporate reputation (p.18) CEOs report that CSR initiatives have less effect than corporate reputation on bottom line issues

of increased sales and enhanced stock price (p.9, 19) Fewer CEOs take responsibility for managing CSR initiatives than for corporate reputation (p.21)

Corporate Governance While CEOs agree a sharper focus on corporate governance is here to stay, less than a quarter

strongly agree that it will lead to improved ethical corporate behaviour (p.24, 27)

Executive SummaryExecutive Summary

Research Objectives & DesignResearch Objectives & Design


6

Background & ObjectivesBackground & Objectives

The primary objective of the Corporate Reputation Watch study is to provide insights into how the C-suite views the role of reputation management and the increasing importance of corporate governance in a company’s image

The 2003 CRW examines C-level perspectives on issues such as: the importance of corporate reputation influencers of corporate reputation corporate governance standards corporate social responsibility initiatives

7

Study DesignStudy Design Methodology

Qualifying titles of CEO, President or Chairman

North American, Asian and European C-suite executives

Three-page mail survey with internet response option

Survey Returns Over 250 responses (199 public companies, 54 private)

Corporate ReputationCorporate Reputation


9

Change in the Importance of Corporate ReputationChange in the Importance of Corporate Reputation

A vast majority of CEOs agree that a company’s corporate reputation is more important today than it was five years ago

More than half believe it is much more important today

The sentiment is even stronger among European CEOs; almost all say that corporate reputation is at least somewhat more important today

0%

0%

11%

28%

60%

1%NA

Much less important

Somewhat less important

Important to same degree

Somewhat more important

Much more important

Q1: Compared to 5 years ago, would you say that, in general, a company’s corporate reputation today is: Appendix page 29

10

Business Objectives Achieved by Corporate Business Objectives Achieved by Corporate ReputationReputation

Percent of Time Among Top-3

CEO’s overall cite recruiting and retaining employees (73%), promoting transactions and strategic partnerships (61%) and increasing sales (56%) most frequently as the important business objectives achieved by their company’s corporate reputation

Enhancing stock price is a key factor for European (51%) and Asian (65%) companies, but North American CEOs put less emphasis on corporate reputation’s impact on share price (34%)

17%

36%

45%

56%

73%

61%

6%

OtherBuilding supportfor public policy

initiatives

Helping towithstand theimpact of a

crisis

Enhancing yourstock price

Increasing salesPromotingtransactions and

strategicpartnerships

Recruiting andretaining

employees

Q2: What are the three most important business objectives that your company’s corporate reputation helps you to achieve? Appendix page 30

11

39% 37% 37% 34% 31%24%

11%4% 2% 0%

33%

48%

Ability

to C

omm

unicat

e

Tran

spar

ency

Human

Valu

es

Trea

tmen

t of E

mpl

oyee

s

Ability

to In

nova

te

CEO Rep

utat

ion

Adapt

ability

to C

hang

e

Handli

ng o

f Soc

ial/

Enviro

nmen

tal ..

.

Reput

ation

of B

oard

Mem

bers

CFO R

eput

ation

Inte

rnet

Com

mun

icatio

ns

Succe

ss in

e-c

omm

erce

Internal Aspects of Company Effecting ReputationInternal Aspects of Company Effecting Reputation CEOs overall identify the ability to communicate (48%) as the internal aspect of their company

most influential on corporate reputation (excluding financial performance). Transparency (39%), human values (37%) and treatment of employees (37%) are also among the top three

European and Asian CEOs place great weight on transparency (41% and 53% respectively)

North American business leaders cite the treatment of employees as the top internal driver of reputation (52%)

Q3: Which three of the following internal aspects of your company are the most influential on your company’s corporate reputation, other than financial performance?


Appendix page 31

12

CEOs overwhelmingly point to customers as the external force with greatest effect on reputation (78%). Print media (48%) and financial analysts (44%) round out the top three

European CEOs believe the greatest external force is exerted by print media (76%)

The internet, NGOs and labor unions are viewed as having negligible influence

48%44%

41%

33%

15%

6%3% 2% 2%

25%

78%

Customers Print Media FinancialAnalysts

Shareholders IndustryAnalysts

Regulators/Government

BroadcastMedia

NGOs Internet Legislators Labor Unions

Q4: Which three of the following external forces are the most influential on your company’s corporate reputation?

External Aspects of Company Effecting External Aspects of Company Effecting ReputationReputation


Appendix page 32

13

Threats to ReputationThreats to Reputation CEOs rank unethical corporate behavior (50%) and product and service problems (50%) as the

top two threats (other than financial performance) to corporate reputation, with criticism from customers (40%) and the media (38%) not far behind

In Europe CEOs fear the impact of media criticism on reputation (53%)

North American CEOs are primarily concerned by the threat presented by product / service problems (46%) and litigation and adverse court judgments (42%)

Q5: Threats to a company’s reputation can come from a variety of sources other than financial performance. Which three of the following threats are you most concerned about regarding your company?


50%

40% 38% 37%

21%

12% 10%4% 2%

31%

50%

UnethicalCorporateBehavior

Product/Service

Problems

CustomerCriticism

MediaCriticism

Disasterwhich

DisruptsOperations

Litigation/AdverseCourt

Judgments

PersonalMalfeasanceby IndividualSr. Execs

InterestGroup/ NGO

Criticism

GovernmentCriticism

InternetCriticism

Other

Appendix page 33

14

Weight Placed by Board on CEO Candidate’s Weight Placed by Board on CEO Candidate’s Ability to Protect & Enhance ReputationAbility to Protect & Enhance Reputation

All CEOs agree that a when choosing a successor for the CEO, the Board places at least some weight on a candidate’s ability to protect and enhance the company’s reputation.

Nearly three quarters of executives now place a great deal of weight on that ability

0%

2%

25%

72%

1%NA

No weight atall

A little weight

Moderateamount of

weight

A great dealof weight

Q6: In choosing a new successor for the CEO, how much weight does your Board place on the individual’s ability to protect and enhance your company’s reputation? Appendix page 34

15

Effect of Tainted Corporate Reputation on Effect of Tainted Corporate Reputation on Candidate HiringCandidate Hiring

90% of CEOs say that the corporate reputation of a candidate’s current employer has at least a moderate impact on the decision to hire

1%

8%

40%

50%

1%NA

No impact

Small impact

Moderateimpact

Strong impact

Q7: If a candidate for an officer-level position in your company is coming from a firm with a tainted corporate reputation, how much impact does this have on evaluations and hiring decisions regarding that person? Appendix page 35

16

Primary Responsibility for Managing Corporate Primary Responsibility for Managing Corporate ReputationReputation Nearly two-thirds of CEOs (65%) place the responsibility for managing corporate reputation on

themselves, ahead of the Board (14%)

80% of North American CEOs place the responsibility on themselves (compared to 44% Europe and 45% Asia)

The Board plays a much greater role in managing reputation issues in Europe (38%), and Asian companies rely considerably more on Corporate Communications and PR directors (27%)

14%12%

2% 1% 0% 0% 1%3%

65%

1%

CEO Board CorporateComm/

PR/PublicAffairs

OtherSeniorMgmt

Legal CFO Marketing HumanResources

Other NA

Q8: Where in your organization is the primary responsibility for managing issues of corporate reputation? Appendix page 36

17

Measures of Corporate ReputationMeasures of Corporate Reputation Analysis of media coverage (66%), financial performance (64%) and financial analyst research

(58%) are most frequently cited by CEOs as measures they use to gauge their company’s reputation

Formal customer/stakeholder research is favored by just over half of CEOs

Only 3% of CEOs say that they have no reputation measures in place

Q9: Which, if any, of the following formal or informal measures do you have in place to measure your company’s corporate reputation?

64%58%

52% 51%

21%16%

3% 3%

46%

66%

MediaCoverage

FinancialPerformance

FinancialAnalyst

Research/Commentary

Word of Mouth Customer/StakeholderResearch

PublishedRankings

Price/Earnings Ratio

MonitoringInternet

Other No Measures

Appendix page 37

Corporate Social ResponsibilityCorporate Social Responsibility


19

Contribution of CSR Initiatives on Company’s Contribution of CSR Initiatives on Company’s ReputationReputation

80% of CEOs believe corporate social responsibility initiatives contribute at least moderately to their companies’ reputation; three out of ten believe the contribution is significant

European CEOs put the greatest weight on CSR initiatives: 44% say the initiatives contribute significantly to reputation, compared to 26% of North Americans 3%

17%

50%

30%

1%NA

Not at All

A Little

ModerateAmount

SignificantAmount

Q10: How much do you feel that corporate social responsibility initiatives contribute to your company’s corporate reputation? Appendix page 38

20

Business Objectives that CSR Helps to FulfillBusiness Objectives that CSR Helps to Fulfill CEO’s cite recruiting and retaining employees (71%) as the most important business objective achieved by their

company’s corporate social responsibility initiatives. Favorable media coverage (51%) and promoting transactions and partnerships (40%) round out the top three.

Asian CEOs mention favorable media coverage (57%) as the most important outcome

Increasing sales and enhancing stock price are mentioned more frequently as objectives of corporate reputation than corporate social responsibility (56% and 45% versus 35% and 21%, respectively).

Q11: What are the three most important business objectives that corporate social responsibility helps to fulfill?

51%

40% 38%35%

21%

4%

27%

71%

Recruiting/Retaining

Employees

Favorable MediaCoverage

PromotingTransactions/Partnerships

Help WithstandImpact of Crisis

Increasing Sales Build Support forPublic Policy

Initiatives

Enhancing StockPrice

Other


Appendix page 39

21

Primary Responsibility for Managing CSRPrimary Responsibility for Managing CSR

Q12: Where in your organization is the primary responsibility for managing initiatives of corporate social responsibility?

14%12%

7%4%

1% 0%2% 4%

55%

2%

CEO CorporateComm/

PR/PublicAffairs

Board OtherSeniorMgmt

HumanResources

Legal CFO Marketing Other NA

Over half of CEOs (55%) place the responsibility for managing corporate social responsibility initiatives on themselves (but this is lower than for managing and protecting overall corporate reputation, 65%)

In Europe and Asia there are greater shared responsibilities; 28% of European executives and 22% of Asians place responsibility for managing CSR initiatives on the Board, compared to only 4% of Americans

Appendix page 40

22

Reputation and CSR Management ResponsibilityReputation and CSR Management Responsibility

Q12: Where in your organization is the primary responsibility for managing initiatives of corporate social responsibility?

14% 12%

2% 0%

55%

14% 12%7%

4%

65%

CEO Corporate Comm/PR/Public Affairs

Board Other Senior Mgmt Human Resources

Manage Reputation Manage CSR

CEOs appear to take more responsibility for managing corporate reputation than CSR initiatives

Q8: Where in your organization is the primary responsibility for managing issues of corporate reputation? Appendix page 36, 40

Corporate GovernanceCorporate Governance


24

How Well Boards are Doing in Performing How Well Boards are Doing in Performing Oversight RoleOversight Role

4%

32%

44%

20%

0%NA

Poor Job

Fair Job

Good Job

Excellent Job

Q13: How good a job do you feel corporate Boards of Directors are doing in performing their oversight role in businesses in general?

Two-in-three CEOs believe Boards are doing a good or excellent job in performing an oversight role

There is room for improvement; only two-in-ten give them an Excellent rating

Appendix page 41

25

More Stringent Corporate Governance –More Stringent Corporate Governance –Permanent Fixture or Passing TrendPermanent Fixture or Passing Trend

The vast majority of CEOs (81%) believe that the recent focus on more stringent corporate governance and board oversight is going to be a permanent fixture in the corporate landscape

19%

81%

Permanent Change

Passing Trend

Q14: In your opinion, is the recent focus on more stringent corporate governance and board oversight going to be a permanent fixture in the corporate landscape, or is it part of another passing trend that will fade over time? Appendix page 42

26

Predictions for Most Lasting Reaction of Focus on Predictions for Most Lasting Reaction of Focus on Corporate GovernanceCorporate Governance Nearly three out of four executives cite increased disclosure as the top lasting reaction to the recent

corporate governance focus, and over two thirds believe that a higher proportion of independent directors will be a long-term outcome

The separation of the Chairman and CEO scored highly among European (66%) and Asian (45%) CEOs, but not among their North American counterparts (19%)

Q15: Among the reactions to the recent focus on corporate governance given below, please rank-order the three that you think will be the most long-lasting in the corporate world in general.

68%

42%

32%30%

20%

5% 4%

74%

21%

IncreasedDisclosure

HigherProportion ofIndependent

Directors

IncreasedScrutiny of

CEOs

Separation ofChairman/

CEO

More ActivistShareholders

More Time/Resources for

CSR

Less Incentive-Based Comp

for Execs

Shorter CEOTerm

Other


Appendix page 43

27

Initiatives Undertaken in Response to Corporate Initiatives Undertaken in Response to Corporate WrongdoingsWrongdoings In response to increasing revelations of corporate wrongdoing the vast majority of executives revealed they

have reassessed the ethical processes in their firms, including improving internal controls, reviewing auditor and accounting relationships and revising codes of conduct.

In Europe a high priority for business leaders was to scrutinize executive compensation packages (56%), though this was not a major concern for North American or Asian CEOs (33% and 23%)

Q16: What sorts of initiatives has your company undertaken in the past year in response to increasing revelations of corporate wrongdoings in the business world in general?

64%

55%

44%

39%

33%

25%

6%2%

76%

33%

EnhanceInternalControls

ReviewAuditor/

AccountingRelationships

Revise Codesof Conduct

Ethics-relatedEmployeeTraining

OutsideResources for

Process/Procedure

Review

Procedures toEnsure Board

MemberIndependence

ScrutinizeExec

Compensation

ReevaluateQualificationsto Chair BoardCommittees

Other None

Appendix page 44

28

Will More Stringent Corporate Governance Lead Will More Stringent Corporate Governance Lead to Improved Ethical Behavior?to Improved Ethical Behavior?

4%

11%

61%

19%

5%NA

StronglyDisagree

SomewhatDisagree

SomewhatAgree

StronglyAgree

Q17: How much do you agree or disagree that more stringent corporate governance standards will lead to improved ethical corporate behavior?

While 61% of executives somewhat agree that more stringent corporate governance will lead to improved ethical behavior, only 19% strongly agree it will, suggesting they remain unconvinced

Appendix page 45

AppendixAppendix


30

Q1: Compared to 5 years ago, would you say that, in general, a Q1: Compared to 5 years ago, would you say that, in general, a company’s corporate reputation today is: company’s corporate reputation today is:

Much more important

Somewhat more important

Important to same degree

Somewhat less important

Much less important NA

Total 60% 28% 11% 0% 0% 1%

North American 55% 30% 13% 0% 1% 1%

European 66% 31% 3% 0% 0% 0%

Asian 59% 23% 9% 0% 0% 1%

31

Q2: Three most important business objectives that your company’s Q2: Three most important business objectives that your company’s corporate reputation helps you to achieve? corporate reputation helps you to achieve?

Recruiting and retaining

employees

Promoting transactions and

strategic partnerships

Increasing sales

Enhancing your stock

price

Helping to withstand the impact of a

crisis

Building support for

public policy initiatives Other

Total 73% 61% 56% 45% 36% 17% 6%

North American 80% 62% 56% 34% 38% 17% 6%

European 78% 48% 50% 51% 35% 18% 3%

Asian 57% 67% 62% 65% 33% 11% 8%

32

Q3: Which three of the following internal aspects of your company Q3: Which three of the following internal aspects of your company are the most influential on your company’s corporate reputation, are the most influential on your company’s corporate reputation, other than financial performance?other than financial performance?

Ability to

Communicate Transparency Human ValuesTreatment of Employees

Ability to Innovate CEO Reputation

Total 48% 39% 37% 37% 34% 33%

North American 50% 31% 44% 52% 29% 34%

European 66% 41% 21% 21% 31% 39%

Asian 36% 53% 29% 15% 47% 32%

Adaptability to

ChangeHandling of Social/

Environmental Issues

Reputation of Board Members

CFO Reputation

Internet Communications

Success in e-commerce

Total 31% 24% 11% 4% 2% 0%

North American 23% 21% 6% 4% 2% 0%

European 28% 37% 9% 0% 3% 0%

Asian 46% 20% 19% 5% 1% 0%

33

Q4: Which three of the following external forces are the most Q4: Which three of the following external forces are the most influential on your company’s corporate reputation?influential on your company’s corporate reputation?

Customers Print Media Financial Analysts Shareholders Industry Analysts

Total 78% 48% 44% 41% 33%

North American 82% 42% 40% 34% 38%

European 66% 76% 51% 28% 25%

Asian 76% 51% 51% 59% 27%

Regulators/ Government Broadcast Media NGOs Internet Legislators Labor Unions

Total 25% 15% 6% 3% 2% 2%

North American 28% 17% 7% 4% 3% 3%

European 25% 19% 9% 0% 6% 0%

Asian 17% 11% 1% 1% 0% 1%

34

Q5: Threats to a company’s reputation can come from a variety of sources Q5: Threats to a company’s reputation can come from a variety of sources other than financial performance. Which three of the following threats are other than financial performance. Which three of the following threats are you most concerned about regarding your company?you most concerned about regarding your company?

Unethical Corporate Behavior

Product/ Service Problems

Customer Criticism Media Criticism

Disaster which Disrupts

Operations

Litigation/ Adverse Court

Judgments

Total 50% 50% 40% 38% 37% 31%

North American 41% 46% 30% 37% 42% 42%

European 56% 41% 35% 53% 28% 24%

Asian 65% 63% 64% 33% 29% 13%

Personal Malfeasance by

Individual Sr. ExecsInterest Group/ NGO Criticism

Government Criticism Internet Criticism Other

Total 21% 12% 10% 4% 2%

North American 19% 14% 14% 6% 3%

European 31% 22% 9% 0% 0%

Asian 21% 4% 4% 0% 0%

35

Q6: In choosing a new successor for the CEO, how much weight Q6: In choosing a new successor for the CEO, how much weight does your Board place on the individual’s ability to protect and does your Board place on the individual’s ability to protect and enhance your company’s reputation?enhance your company’s reputation?

A great deal of

weightModerate amount

of weight A little weightNo weight at

all NA

Total 72% 25% 2% 0% 1%


European 75% 22% 0% 0% 3%

Asian 68% 31% 0% 1% 0%

36

Q7: If a candidate for an officer-level position in your company is coming Q7: If a candidate for an officer-level position in your company is coming from a firm with a tainted corporate reputation, how much impact does from a firm with a tainted corporate reputation, how much impact does this have on evaluations and hiring decisions regarding that person?this have on evaluations and hiring decisions regarding that person?

Strong impact Moderate impact Small impact No impact NA

Total 50% 40% 8% 1% 1%


European 53% 41% 3% 0% 3%

Asian 49% 39% 9% 3% 0%

37

Q8: Where in your organization is the primary responsibility for Q8: Where in your organization is the primary responsibility for managing issues of corporate reputation?managing issues of corporate reputation?

CEO Board

Corporate Comm/

PR/Public AffairsOther Senior

Mgmt Legal

Total 65% 14% 12% 2% 1%


European 44% 38% 13% 3% 0%

Asian 45% 20% 27% 1% 0%

CFO MarketingHuman

Resources Other NA

Total 1% 0% 0% 1% 3%


European 0% 0% 0% 0% 3%

Asian 1% 0% 1% 3% 1%

38

Q9: Which, if any, of the following formal or informal measures do Q9: Which, if any, of the following formal or informal measures do you have in place to measure your company’s corporate reputation? you have in place to measure your company’s corporate reputation?

Media

CoverageFinancial

Performance

Financial Analyst Research/

CommentaryWord of Mouth

Customer/ Stakeholder Research

Total 66% 64% 58% 52% 51%

North American 66% 61% 52% 59% 55%

European 84% 53% 75% 44% 56%

Asian 58% 74% 64% 42% 43%

Published Rankings Price/ Earnings Ratio Monitoring Internet Other No Measures

Total 46% 21% 16% 3% 3%


European 63% 25% 16% 6% 0%

Asian 47% 26% 9% 1% 1%

39

Q10: How much do you feel that corporate social responsibility Q10: How much do you feel that corporate social responsibility initiatives contribute to your company’s corporate reputation? initiatives contribute to your company’s corporate reputation?

Significant

AmountModerate Amount A Little Not at All NA

Total 30% 50% 17% 3% 1%


European 44% 50% 6% 0% 0%

Asian 30% 49% 19% 3% 0%

40

Q11: What are the three most important business objectives that Q11: What are the three most important business objectives that corporate social responsibility helps to fulfill? corporate social responsibility helps to fulfill?

Recruiting/ Retaining

Employees

Favorable Media

Coverage

Promoting Transactions/ Partnerships

Help Withstand Impact of

CrisisIncreasing Sales

Build Support for

Public Policy

InitiativesEnhancing Stock Price Other

Total 71% 51% 40% 38% 35% 27% 21% 4%

North American 78% 45% 43% 43% 36% 26% 11% 6%

European 81% 64% 25% 28% 32% 24% 25% 3%

Asian 53% 57% 43% 27% 37% 32% 38% 1%

41

Q12: Where in your organization is the primary responsibility for Q12: Where in your organization is the primary responsibility for managing initiatives of corporate social responsibility? managing initiatives of corporate social responsibility?

CEO

Corporate Comm/

PR/Public Affairs Board

Other Senior Mgmt

Human Resources Legal CFO Marketing Other NA

Total 55% 14% 12% 7% 4% 2% 1% 0% 2% 4%

North American 66% 11% 4% 7% 3% 1% 1% 1% 2% 5%

European 41% 19% 28% 0% 3% 0% 3% 0% 0% 6%

Asian 39% 19% 22% 9% 4% 3% 0% 0% 1% 3%

42

Q13: How good a job do you feel corporate Boards of Directors are Q13: How good a job do you feel corporate Boards of Directors are doing in performing their oversight role in businesses in general?doing in performing their oversight role in businesses in general?

Excellent Job Good Job Fair Job Poor Job NA

Total 20% 44% 32% 4% 0%


European 22% 50% 28% 0% 0%

Asian 18% 50% 32% 0% 0%

43

Q14: In your opinion, is the recent focus on more stringent corporate governance Q14: In your opinion, is the recent focus on more stringent corporate governance and board oversight going to be a permanent fixture in the corporate landscape, and board oversight going to be a permanent fixture in the corporate landscape, or is it part of another passing trend that will fade over time?or is it part of another passing trend that will fade over time?

Permanent Change Passing Trend

Total 81% 19%

North American 78% 22%

European 81% 19%

Asian 88% 12%

44

Q15: Among the reactions to the recent focus on corporate Q15: Among the reactions to the recent focus on corporate governance given below, please rank-order the three that you think governance given below, please rank-order the three that you think will be the most long-lasting in the corporate world in general.will be the most long-lasting in the corporate world in general.

Increased Disclosure

Higher Proportion of Independent Directors

Increased Scrutiny of

CEOsMore Activist Shareholders

Separation of Chairman/

CEO

Total 74% 68% 42% 30% 32%

North American 73% 79% 51% 26% 19%

European 66% 50% 31% 31% 66%

Asian 82% 55% 27% 38% 45%

More Time/ Resources

for CSRLess Incentive-Based

Comp for Execs Shorter CEO Term Other

Total 21% 20% 5% 4%

North American 18% 22% 5% 5%

European 25% 21% 0% 3%

Asian 25% 13% 9% 1%

45

Q16: What sorts of initiatives has your company undertaken in the Q16: What sorts of initiatives has your company undertaken in the past year in response to increasing revelations of corporate past year in response to increasing revelations of corporate wrongdoings in the business world in general?wrongdoings in the business world in general?

Enhance Internal Controls

Review Auditor/ Accounting

Relationships Revise Codes

of Conduct

Ethics-related employee training

Outside Resources for Process/ Procedure

Review

Total 76% 64% 55% 44% 39%

North American 72% 70% 49% 42% 44%

European 72% 53% 72% 38% 25%

Asian 86% 57% 59% 53% 35%

Procedures to Ensure Board Member Independence

Scrutinize Exec Compensation

Reevaluate Qualifications to Chair Board Committees Other None

Total 33% 33% 25% 6% 2%


European 31% 56% 28% 9% 0%

Asian 27% 23% 15% 4% 1%

46

Q17: How much do you agree or disagree that more stringent Q17: How much do you agree or disagree that more stringent corporate governance standards will lead to improved ethical corporate governance standards will lead to improved ethical corporate behavior?corporate behavior?

Strongly Agree

Somewhat Agree

Somewhat Disagree

Strongly Disagree NA

Total 19% 61% 11% 4% 5%


European 13% 59% 9% 6% 13%

Asian 30% 55% 7% 3% 5%

47

For more information on the Corporate Reputation Watch 2003, please contact:

Andrew Laurence, Chairman EMEA Practices, Hill & Knowlton

Tel: 020 7413 3005

Email: [email protected]

Andrew Pharoah, Head of Corporate Affairs UK, Hill & Knowlton

Tel: 020 7413 3049


Bob Reynolds, Senior Client Partner, Korn/Ferry International

Tel: 020 7312 3100


Corporate Reputation Watch Prepared for Research conducted by October, 2003 Summary of Findings and.

Documents

n corporate reputation

n corporate governance

n drivers of reputation

n european ceos

corporate governance

internal driver of reputation

unethical corporate

corporate reputations