Wates and the reputation agenda
- Monday 12 Nov, 2018
Patrick Tooher, our Director of Strategic Media Communications, unpacks what the Wates review means for large corporates and their comms teams.
The final version of the Wates’ report into larger private company governance has now been published. Download our take on what the report means for your business, or read on for an overview.
It’s part of Theresa May’s push for ’responsible capitalism’, which received added impetus following the collapse of high-street retailer BHS.
So, what does the long-awaited report mean for communications professionals?
It affects some of the biggest brands in the UK
As household names, each employing tens of thousands of people and serving millions of customers, large private companies like John Lewis, Virgin and Iceland have always faced some degree of public scrutiny.
But the new disclosure rules mean they and many more like them are about to become more publicly accountable than ever.
A large company is defined as having either 2,000 employees, or a turnover above £200m and a balance sheet of more than £2bn.
It’s the biggest shake-up in corporate reporting in a generation
For the first time, larger private companies will be required to report if they have complied with a corporate governance code, and to provide proof they have taken into account the interests of all stakeholders, not just investors.
That’s because their conduct and the way they are run have a considerable impact on the interests of employees, suppliers, customers and others.
It’s about the spirit as well as the letter of the code
To enhance confidence in big business, companies will need to demonstrate they are well run, take a responsible approach to corporate governance and show regard for their wider stakeholders.
This means what they are obliged — or choose — to disclose in their publicly-available statements will be watched and analysed more than ever before.
Although the new code will be voluntary, a tick-box approach won’t be good enough — and questions will be asked of those who don’t adopt the code. This is not an issue that can simply be ignored.
Reputation is more important than ever
Good reputation is a major and proven driver of commercial success — customers buy brands they trust and shun those they don’t.
Indeed, one recent study estimated reputations were worth more than £1,000bn to the corporate value of Britain’s 350 biggest companies — that’s more than third of their overall worth.
But we also know that trust in business is on the slide, with poor communication a key driver of reputational decline.
So, it’s clear more needs to be done to ensure companies stand out from the crowd and appear genuine, both in what they say and do.
Wates provides one such opportunity for communications leads to push reputation higher up the boardroom agenda.
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