New Research Highlights the Value of the CEO ‘Brand’ in Withstanding the Negative Impact of Crises
In fact, 81% of the fastest growing companies had a vocal or outspoken CEO.
Research Indicates CEOs Who Had a Track Record of Communicating Helped Protect as Much as USD$260 Billion More in Shareholder Value in the Initial Stages of the COVID-19 Pandemic
Vocal CEOs Lead Over 80% of Companies with Fastest Growth Since 2015
All Female CEOs Leading Fastest Growing Companies Are Consistent Communicators
BRUSSELS, Belgium, July 13, 2020 (GLOBE NEWSWIRE) -- New research by the Strategic Communications segment of FTI Consulting, Inc. (NYSE: FCN) suggests that companies whose CEOs embody strong leadership, are publicly vocal, and have a visible brand better withstood the initial negative share price impacts of the COVID-19 pandemic. During the early stages of the crisis, these vocal CEOs were able to protect USD$260 billion in additional shareholder value for the companies in the study.
While active communication is only one of the many factors influencing corporate performance, this success stemmed from brand equity gained before the COVID-19 crisis. In fact, 81% of the fastest growing companies had a vocal or outspoken CEO. Of these 81% of CEOs, nearly 40% of them embraced the growing importance of ESG and “stakeholder capitalism,” which translated into greater stakeholder confidence during the COVID-19 pandemic. These “stakeholder CEOs” – those who spoke about issues not directly related to their business’s bottom line – outperformed their industry peers by an average of 3.75%.
To come to these conclusions, FTI Consulting analysed the CEOs of the top 100 companies that had the highest share price growth rate between 1 January 2015 and 31 December 2019 across three indexes: The S&P 500, FTSE 250 and Euro Stoxx. The research team monitored and observed mentions of the CEO in the news and on social media to see if quotes, statements or presentations or panel discussions made by the CEO generated a peak in discussions or news coverage about him or her. The research team also assessed whether CEOs had a social media presence and if they were active on social channels. After noting the findings, researchers assessed the share price performance of the companies during part of the global COVID-19 pandemic, from one week before the World Health Organisation declared a pandemic (4 March 2020) to 11 May 2020. The detailed description of the methodology can be found in The CEO Brand and Its Impact on Business.
Mark McCall, Global Segment Leader of the Strategic Communications segment at FTI Consulting, said: “This research shows that the brand of the CEO ought to be a board-level consideration. While there are certainly many factors that contribute to the growth and value of a company, it is telling that CEOs who show true leadership through effective communication perform well, particularly in a crisis. Strong and consistent communication about the near-term challenges and long-term drivers of a business can provide focus for the organization, reassure employees, customers and suppliers, and protect a company during a broader market downturn.”
The data also show that leaders of fast-growing companies are increasingly embracing communications as a tool to support their businesses’ growth. This was true even before the COVID-19 pandemic, with companies either choosing more vocal leaders or leaders becoming more vocal over time, even in traditionally more discrete industries. For instance, in healthcare, a sector that is generally perceived to be less outspoken, CEOs who were more communicative and transparent than many of their peers led two of the best performing companies in terms of share price growth.
Lauren Burge, a Managing Director and Head of the Corporate Reputation practice in Brussels for FTI Consulting, said: “It’s a critical time for businesses today. Open and transparent leadership are paramount, not just to employees or customers, but also to shareholders. Interestingly, it does not mean your CEO needs to seek controversy or open a flood of posts on Twitter. Instead, our research shows how employees, shareholders and customers react positively to thoughtful, authentic communications.”
Interestingly, as many CEOs globally remain hesitant to embrace these new expectations for their role, women seem to be leading the charge. While women were underrepresented among the CEOs in the study (4.7%), all had a distinctive brand and spoke out regularly.
NOTE TO EDITORS: The full report, The CEO Brand and Its Impact on Business, is available here.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 5,500 employees located in 27 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.35 billion in revenues during fiscal year 2019. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.
FTI Consulting, Inc. 200 Aldersgate Aldersgate Street London EC1A 4HD Media Contact: Wai Hoi Tsang +32 495 65 74 55 [email protected]
