New company reporting regulations have come into force this month which will have a significant impact on the way large companies, and boards, address and manage corporate reputation and company brand value.
Corporate governance has been under the microscope, and rarely out of the headlines, in recent years and political, media, and public scrutiny has continued to increase as perceived inadequacies in the system were brought to light. According to the Government green paper published in 2016, “It is clear that in recent years, the behaviour of a limited few has damaged the reputation of the many. It is clear that something has to change.”
Strong words. And there have been some swinging changes.
To take one example, The Companies (Miscellaneous Reporting) Regulations 2018, applicable from financial years starting from January 2019, introduces new requirements for company Strategic Reports and Directors Reports; not least how Directors’ Section 172 duties are evaluated and reported on and how businesses measure employee and other stakeholder engagement.
At the same time the FRC, along with a broader coalition of industry voices, have worked to develop and launch the Wates Principles which are intended to assist large private companies and directors comply with these, and other, new corporate governance regulations.
Much of this, of course, sits squarely on the lap of financial reporting, accounting and audit professionals.
However, this new regulatory environment raises significant questions about how companies – and critically their boards – engage with brand and communications professionals. Intangible assets such as brand and reputation (as well as Intellectual Property) now have a far greater role to play alongside financial performance in assessing the health and future trajectory of an organisation. In addition, how far businesses can demonstrate effective communications with key stakeholders – from their staff to their supply chain to their wider communities – will carry more weight than ever before.
While the government’s 2016 green paper flagged industry-wide reputational damage as a resulting effect of perceived governance failings, the new reporting requirements, alongside wider measures to ‘lift the corporate veil’ and increase transparency and accountability (think Gender Pay Gap reporting…) pose significant reputational questions for individual organisations. Furthermore, just how all of this new information (which, to the uninitiated, can often seem esoteric and intangible) is to be articulated in a coherent, robust narrative will inevitably require far greater levels of engagement and collaboration between boards and their communications teams, as well as a sustained effort by communications professionals to continually improve their own reporting methods – ensuring they meet new evolving needs of the boardroom.
Reputation management, brand and communications professionals more broadly, have often struggled to be heard by, let alone been afforded a seat at, the boardroom table. That might be about to change.
Infinite Global recently partnered with the Non-Executive Directors Association to examine the role of Non-Execs in corporate reputation management at board level. Click here to find out more, or get in touch.
Authored by Tal Donahue, Account Director at Infinite Global