By Marwan Abu-Ghanem
Regional Media Director, Middle East

Corporate reputation represents the net emotional reaction - good or bad, weak or strong - of a company’s key stakeholders. Good corporate reputation can enhance business in good times, protect it from turbulent times and can be damaged in an instant. Our Middle East study in 2007, tracking senior business executives on reputation-related issues, provided interesting results.

There has been a trend of increasing importance for corporate reputation in the Middle East over the past few years. Decision-makers are recognizing the importance of understanding corporate reputation, its benefits, its drivers, how it needs to be developed and maintained and what is required to protect it.

The challenges faced by companies in the Middle East are like those experienced in most other markets around the world, though most business executives in the region believe that building a strong and distinct corporate culture is the most difficult to master.

In the Middle East, the onus of a strong corporate culture rests primarily on the shoulders of the Chief Executive Officer who recognises the productivity and efficiencies achieved by companies with strong cultures. The region has grown out of paternalistic business cultures which have been very focused on “Family Heads” as business heads. In the current drive to ‘professionalise’ business across the region, this is beginning to change but the primary cultural drivers will remain for some time.

The study also revealed that a high level of importance is attached to fair workplace policies and procedures and the demonstration of employee value. Internal communications is one avenue for this and had progressively increased in importance over the past few years throughout the Middle East. Its criticality to maintaining good corporate reputation, through employee retention and recruitment, improved communication throughout the organization including feedback, positive work environments and proactive employee ambassadors, is increasingly being recognized by business leaders in the region.

The growing expansion of Middle Eastern firms has also placed an imperative on developing human capital and ensuring synergies and integration. Internal communications strategies and tactics can help to develop a more cohesive and aligned workforce and staff – which in turn helps to manage challenges, increase productivity and achieve bottom line results.

CSR and governance practices have also increasingly become integral to the management of a positive corporate reputation and investment in related programs is indeed occurring. However, the significance attached to these initiatives varies throughout the region.

Robust and transparent governance controls have risen dramatically in prominence in all markets as drivers of a company’s overall corporate reputation. Respondents noted in particular the increased emphasis the financial community places on governance when evaluating reputation and prospects. They acknowledged the increasing burden that more stringent discloser requirements have placed on them but believe these reforms will have a lasting impact that should bolster investor confidence.

Also apparent is that related initiatives are slowly being developed and implemented, though the approach is still in relative infancy. Challenges identified with the increase in stringent governance requirements included heavy but manageable associated costs, increased administrative complexity and greater investment in sophisticated tools and systems.

When intelligently developed and managed, corporate reputation can accurately reflect an organisation’s commitment to quality and its relationships with its various targeted stakeholders, resulting in stronger loyalty from consumers and employees, comparatively stable revenues, susceptibility to fewer risks, greater latitude from stakeholders.

It is clear that positive reputation is a requirement to building and sustaining a healthy business. Perception now holds almost as much value as performance and profit, and therefore, the exhibition of a strong positive reputation amongst all key stakeholders is an essential component to remaining competitive in this marketplace.