Corporate reputation management is key to economic growth in SA

TOP COMPANIES SA (TCSA) is an annual survey that measures the reputation of some of the most visible businesses in the country.

Reputation is a sum total of a business’s intent, behaviour and relationships that it develops with important stakeholders.

In existence since 2010, TCSA has established that more reputable companies tend to have a large pool of stakeholders while less reputable companies see their stakeholders, by and large, as shareholders and customers.

The 2018 TCSA results are imminent. This year, the focus is on the relationship between aggregated corporate reputation of all businesses and the economic welfare of the country.

Over the years that TCSA has been a primary feature of the corporate calendar and two important questions have arisen time and time again. Where does your business stand on corporate reputation management? Is it more important or less important than your marketing, advertising and PR?

While the answers are bound to stimulate a healthy debate, corporate reputation stretches beyond your office precinct, customers and staff. Truly reputable corporate citizens cannot extricate their individual performance on a long-term basis from that of the economy, and accordingly from the well-being of the country and its people.

Worrying decline South Africa’s economy has been on a consistent net decline since 2007, this being highlighted by the declining sovereign credit ratings.

The country has been facing an increasing Consumer Price Index, meaning that inflation has been on the rise, especially relative to people’s income. This has the impact of depressing living standards and quality of life.

There’s a growing concern that business does not seem alarmed by this trend, and, if alarmed, it is not doing enough to reverse this downward spiral, notwithstanding that business is the biggest beneficiary of a functional society.

Big corporates are guilty of the narrowness of being self-centred and focusing mainly on bigger profits, even in an environment where it is becoming increasingly obvious that the opportunity for low-hanging profits no longer exists.

This insular nature of corporates and the obvious tunnel vision they have of the economy is largely because they are singularly committed to building their own businesses, even if this is against the tide of a declining South African economy.

Since 2007, the unemployment rate has risen from 23.8 percent to 26.7 percent in the first quarter this year, and the unemployment rate for those younger than 25 is at a shocking 67.4 percent.

Tip of iceberg While it is not entirely the prerogative of business to create employment, such high levels of unemployment are not in the interests of business either in terms of economic, social and political stability. The worsening unemployment crisis in the country is merely a tip of the iceberg as far as the overall health of the economy is concerned.

The so-called enlightened self-interest or corporate social investment is no longer enough given the extreme poor-rich gap. What is needed is for reputable corporate entities that can engage in substantive collaborative future vision projects to turn the tide.

While well intended, most corporate social investment projects tend to be typified by a bystander mentality.

South Africa has suffered a significant decline in nominal gross domestic product, from $416.4 billion (R5.59 trillion) in 2011 to $349.42bn between 2017 and 2018.

The rand has faced a significant decline against the dollar over the same period. In 2007, $1 was the equivalent of R7.25, today it is about R13.50. The Purchasing Power Parity has also declined.

All this is evidence of an economy that needs a serious revision of tactics.

The TCSA concludes that there is a need for visionary corporate leaders who can build their own companies’ reputation by focusing on national imperatives over narrow short termism.

The TCSA 2018 results will be published in September.

Business Report is a media partner of Top Companies SA.