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SA loses faith in its business bosses

Economically active members of the public have “given up” on the country’s corporate leaders, the latest survey by Reputation Institute, a global consultancy firm, shows. Woolworths is the only one of the JSE’s 20 largest firms that has emerged with a strong and robust reputation.

“The 2012 survey shows that South Africans are losing confidence in the leadership of the private sector,” Reputation Institute’s South African managing director, Dominik Heil, told Business Report. He attributed the loss of confidence to the fact that corporate leaders were no longer playing a visible socio-economic role.

Heil said that in the past, corporate leaders like Anton Rupert and Harry Oppenheimer had an integrated vision of the society and economy and “were prepared to play in the public space even if it meant being criticised by the government”.

He added: “Now board chairmen and chief executives are no longer demonstrating their role as corporate citizens. This has had not only a negative impact on the reputations of their companies but also weakens a critical pillar of stability for South Africa.”

Heil added that if corporate leaders were going to play a public role it was important that they were able to demonstrate that they stood for something, “It shouldn’t be just about criticising the government.”

With a score of 78.59 points, indicating a robust reputation, Woolworths has far and away the best reputation among South Africa’s top companies.

“It scored nearly 10 points more than runner-up MTN and topped all seven reputation drivers – products and services, innovation, performance, citizenship, workplace, governance and leadership.”

The survey, done in January and February, relied on 3 000 ratings by 1 300 respondents.

A significant aspect of the results was that leadership was now considered to be the least important aspect of a company’s reputation. Products and services as well as innovation were now considered to be the most important factors.

In the 2008 survey, of the seven factors affecting reputation, leadership had a 13 percent weighting and products and services had a 16.5 percent weighting. In the 2012 survey leadership had slumped to 12.6 percent, after peaking at 16.7 percent in 2011, and products and services had increased to 18.5 percent.

Heil said the low rating given to leadership reflected the low visibility of corporate leaders. “In general our corporate business leaders see themselves as running a slick operation that produces returns, and that’s where it stops. We have a vacuum in visible leaders that are prepared to stand up for a certain vision of society despite the fact that the companies they lead are having a significant effect on vast segments of the population and the nation as a whole.”

Significantly, in view of threats to ban alcohol advertising, SABMiller only score 56.66, which falls into the weak/vulnerable category. Heil said this reflected the view that although SABMiller was well run, the production of alcohol was obviously a concern for people.

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