PELHAM PRESENTATION REPUTATION MANAGEMENT – MODERN CHALLENGES SEPTEMBER 2008

REPUTATION IT IS EASY TO GET IT WRONG 1. PERSONAL LEVEL – SEX SCANDALS, BAD ASSOCIATIONS 2. CORPORATE LEVEL – CRIMINAL NEGLIGENCE, POOR JUDGEMENT 3. COUNTRY LEVEL – POLICY INCONSISTECY, POLITICAL GAFFS

REPUTATION  CORPORATE IMAGE CAN BE CREATED BUT CORPORATE REPUTATION MUST BE EARNED  WHY?  HOW?  INVESTING IN GOOD WILL FROM THE START WILL PAY DIVIDENDS – IT IS A GOOD IDEA TO HAVE ‘FUNDS’ IN THE BANK THAT YOU COULD RELY ON

REASONS TO HAVE GOOD REPUTATION  BETTER EMPLOYEE PERFORMANCE, RETENTION OF STAFF, LOYALTY AND DEDICATION  BETTER HANDLING OF CRISIS SITUATIONS  SUSTAINABLE WEALTH AND VALUE CREATION  POSITIVE INFLUENCE ON REGULATORS WHEN IT MATTERS  POSITIVE RELATIONSHIP WITH LOCAL AUTHORITIES  BETTER CHANCE TO RAISE CAPITAL  REDUCING THE COST OF ENTRY INTO NEW MARKETS – SAVING ON ADVERTISING AND MARKETING  EASIER TO EARN PARTNERS, INVESTORS AND CLIENTS GOOD REPUTATION DEPENDS ON ADOPTED PRACTICES OF ISSUES MANAGEMENT

HOW TO BUILD GOOD REPUTATION  CORPORATE GOVERNANCE  TRANSPARENCY  ACCESSIBILITY  SHAREHOLDER VALUE  CORPORATE RESPONSIBILITY  ROLE AND LEADERSHIP OF THE CEO AND THE TOP MANAGEMENT  EMPLOYEES’ JOB SATISFACTION COMBINED WITH  CLARITY OF STRATEGY AND INTENTIONS  LEARNING FROM MISTAKES OF OTHERS  LISTENING TO GOOD ADVICE  DELIVER ON ALL PROMISES – BETTER TO UNDERPROMISE THAN UNDERDELIVER  CONSTANT UPDATING OF ALL PROCESSES AND INFORMATION BUILDING REPUTATION REQUIRES EFFORTS FROM ALL AND EVERYONE CONCERNED

WHO IS AT RISK  PRODUCERS OF HEALTH RELATED PRODUCTS – PHARMACEUTICALS OR ARMS, FOOD  BRANDS WITH GLOBAL AWARENESS – COCA-COLA, LUXURY BRANDS – GLOBAL RESPONSIBILITY  INNOVATIVE TECHNOLOGIES – RISK OF UNCERTAINTY – MOBILE, DIGITAL, HIGH TECH  ENVIRONMENTALLY SENSITIVE SECTORS – AGRICULTURE, ENERGY, MINING

DEVELOPING REPUTATION IN A FOREIGN MARKET  DEVELOP MEDIA PROFILE  ENSURE BEST PRACTICE ACROSS ALL OPERATIONS  ESTABLISH STRONG, ENGAGING, TRANSPARENT AND ACCESSIBLE MANAGEMENT BOARD  DEVELOP INVESTOR RELATIONS AND FINANCIAL COMMUNICATIONS  PRODUCE DETAILED ANNUAL REPORTS AND TIMELY MARKET UPDATES  DEVELOP CLEAR AND ACHIEVABLE STRATEGY – DELIVER INTEGRATE RISK ANALYSIS ACROSS ALL AREAS OF BUSINESS

NOT ALL PUBLICITY IS GOOD PUBLICITY  POTENTIAL DAMAGE TO CORPORATE IMAGE – PR CAN HELP IN HOLDING OFF MEDIA IN A CRISIS SITUATION  THERE IS A TENDENCY THAT NEGATIVE INFORMATION IS WEIGHTED MORE THAN POSITIVE – FRONT PAGE VERSUS MEEK APOLOGY  SENSATIONALIST APPROACH TO NEWSMAKING – IT IS EASIER TO GET ‘BAD PUBLICITY’ THAN ‘GOOD PRESS’ GOOD PUBLICITY SHOULD BE CAREFULLY PLANNED

IN A CRISIS SITUATION GOOD REPUTATION IS AN INVALUABLE ASSET  ROYAL DUTCH SHELL – OGONI CRISIS  EXXON VALDEZ OIL SPILL – 1989 – ALASKA BOTH COMPANIES DENIED THE FULL EXTENT OF THEIR RESPONSIBILITY/INVOLVEMENT

ON-GOING MEDIA MANAGEMENT – PR CAN HELP  IDENTIFY THE MOST IMPORTANT MEDIA  ACT AS A TRUSTED LIAISON BETWEEN THE MEDIA AND THE COMPANY  MAINTAIN THE FLOW OF ACCURATE AND USEFUL INFORMATION FROM THE COMPANY TO THE MEDIA  HELP ESTABLISH AND BUILD RELATIONSHIPS WITH JOURNALISTS  MONITOR MEDIA AND OTHER USEFUL SOURCES

OLD ECONOMY NEW ECONOMY Brand & Reputation Capital Human Capital Sales “push” focusCustomer “pull” focus Production focusCustomer focus Working Capital High Low Physical Capital YESTERDAY TODAY REPUTATION IS THE MOST VALUABLE FROM INTAGIBLE ASSETS TODAY

CONCLUSION PREPARATION IS KEY IN MODERN MARKET CONDITIONS IT IS CRUCIAL TO INVEST IN REPUTATION – COMPENSATING FOR THE LACK OF IT IS MUCH MORE EXPENSIVE  BUILD – INTRODUCTIN OF RELEVANT PROCESSES  MAINTAIN – CONTINUOUS UPDATING AND ENSURING THE EFFECTIVENESS OF THESE PROCESSES  EXPLOIT – USE GOOD REPUTATION TO ENHANCE FINANCIAL PERFORMANCE COMPANIES LIKE PELHAM CAN HELP BUSINESSES TO GET AHEAD END PELHAM PUBLIC RELATIONS, 1 CORNHILL, LONDON, EC3V 3ND. TEL: