Reputation management in a sceptical world

Welcome to the Eclipse podcast. I'm your host, Toni McKee.

Over the past few years in countries across the world, we've seen political gridlock, primarily in terms of climate -related and social issues. Businesses have stepped into the void, taking a stand and speaking on behalf of their communities and stakeholders. Sometimes this is successful, other times it leads to reputational damage that can cost millions.

How can companies navigate this new political reality, and how should they decide whether to speak up on an issue at all? And if they do, how should they then engage their stakeholders in the decision?

Let's ask today's guest, Stephen Forshaw, an expert in reputation management. Stephen is an experienced senior business leader, having overseen the corporate communications and reputation management function across broad geographies for large international companies, including Singapore Airlines, Microsoft, and Temasek. Today, he serves as Airbus Chief Representative for Australia, New Zealand, and the Pacific. Welcome, Stephen, thanks for joining us. 

Thanks Toni, nice to be here.

How did you get into public affairs and how did you end up sort of specialising in the reputation management part of that?

Yeah, look, it's a good question because I guess I came at this from, even in my school days, being an active debater and being very interested in current affairs and politics. And I worked as a political advisor in my very early career and that was a wonderful experience because at a very young age, I got exposure to a very large and deep set of issues and how those issues are managed in the political process. And let's be clear, when you're working as a political advisor, you live and die by what happens at the election. So, your performance appraisal is done by the community every few years, and it's a pretty savage one. You either get re-elected or you don't. So, you really do pay a lot of attention to what public opinion matters. and in turn what affects public opinion.

And I guess I branched out from that into areas in the corporate world where the intersection between public policy, communications, and stakeholder management and the business world all came together.

And over the years, I've done that in a number of different companies, a number of different industries. At the end of the day, industries will differ, but the primary drivers of what affects reputation are going to remain pretty constant.

Right. Okay. So, in that time, going from politics into the corporate world and having worked in the corporate world for many years, what are the biggest changes that you've seen in your mandate as a public affairs professional?

I think the biggest change has come in recent years through the proliferation of social media. We now give everyone a voice and we've democratized information, we've democratized news, we've democratized journalism. Everyone can be a journalist if they want to be. So rather than, you know, in a generation ago where news was basically an hour of TV, a night and whatever fitted into the newspaper.

News is now a complete saturation of whatever you want to absorb. You can literally spend your entire days scanning through social media, reading newspapers online, blogs, journals, TV news, 24 hour news channels. The proliferation of information is probably the biggest challenge. That's been accompanied by, in some cases, a lack of quality information. Most people will have biases, whether they are conscious or subconscious. We all naturally have biases in what we think and believe. Not all of us are trained in how to filter those out when it comes to presenting information, presenting news. When we talk about the bias in media, it is actually very real now, but it's not typically through your typical media channels, it's more likely through people following channels and social that they agree with.

 So, it's kind of the group think mentality, of listening to the people that you agree with and filtering out the people you don't agree with. And so, the biggest challenge for those in in my line of work is that it's actually very easy for reputation to be formed and broken, on the basis of those preconceived biases about which I spoke earlier.

We just have so many issues that confront governments, corporations, you know, the world around us is very issues rich and we live in a very fast -paced information world so we're also very quick to form and judge opinions and to bake those opinions in and so all of that means that the information age of rational discussion, of consideration of two divergent opinions and forming your own view based on well -read and well -informed understanding of both sides of the argument. That is isn't as strong as it should be and it isn't as strong as it's been in past years, and so that is a predominant challenge for people in my line of work.

So how have you seen companies navigate that challenge from a sort of operational point of view,

I guess, yourself being at the helm in terms of how you do approach those challenges?

Yeah, look, companies have done different things to deal with the information age. I think some have just pushed through on the basis that what they've done in the past remains good enough today for what they want to do in the future. And in a lot of cases that will work for them, often until a big issue arises. And then they've got to deal with something that's outside the playbook. But increasingly, companies are having to spend a lot more on, for example, engaging in building their brand through social media and understanding a lot more about what their stakeholder base thinks about them.

Once upon a time, stakeholders were fairly limited. They tended to be quite localized and predominantly without the same voice that they have today. All of it tended to be in a very small microcosm.

Today, even small companies can have big global stakeholder bases. They can have supply chains all over the world, customers all over the world, employees are very different and divergent views and all of them have a voice. So, companies have had to sort of step up and spend a lot more time and resource understanding their stakeholder base, understanding what their stakeholder base thinks of them.

 And it's made, I think, reputation issues far more complex because they can strike a company more immediately. And as a result of that, conversations about reputation are now elevated to the board.

So once upon a time, boards may have spent a huge amount of their time talking about the financials, the profit and loss, the asset base of the firm. strategy, mergers and acquisitions, the sort of run of the business. But, and I sit on a few boards, and what I've noticed in directional terms is that the issues that boards are now spending a lot more time on all relate to reputation. They are very attuned to who their stakeholder base is. It's shareholders, it's customers, it's suppliers, it's partners. In some cases, it's even your competitors, it's governments, it's regulators. The list goes on and on, and that stakeholder base is widening all of the time, and the set of challenges that brings with it to understand them, map them, have a good sense or a good pulse of what they're thinking about you is, is, is a real challenge for boards to keep up with. –

Oh, that's a good point. That's interesting. I never really thought about how reputation management happens on a board level, but I have thought a lot about what happens inside companies that are experiencing these major reputation crises. I'm thinking of a few American examples like Budweiser. Last year, they did an ad featuring a trans person that sliced right through the culture wars. Many boycotted Budweiser as a result and it really hurt their sales at least temporarily. I haven't heard whether or not they bounce back. And then there's Disney, of course, weighing in on LGBTQ rights in Florida and putting itself right in the epicenter of that controversy. But doing so with really good intentions, trying to protect its employees. I'm wondering, can you think of any examples from your own region of companies having to navigate these massively contentious social issues?

Yeah, look, I think every company is now facing these challenges more acutely. And there's a few reasons for that. One is that the state of politics today means that it's very hard to get consensus on particularly big and controversial issues. Climate is a good example. 10, 15 years ago, there was still an understandable debate and some skepticism around how real is the effect of climate change and how much of it is attributable to man -made actions. I get that, we're past that, we're way past that. I think the scientific evidence is overwhelming and conclusive and what we are starting to see now is that companies and markets are making decisions where politicians can't.

A good example is our reliance on fossil fuels. To some extent coal is a good example as one of the leading contributors among the fossil fuels industry toward climate change impacts.

What we've started to see is that the market has taken a decision on coal. Very few banks will bank or fund new coal developments, new coal -fired power stations, or new coal mines. So, you know, what we are tending to see is that irrespective of the political paralysis around reaching decisions on some of these issues. The public has become well -versed in the issues of the day, and know that the avenue that they had in the past to execute change through politics is no longer the only avenue open to them.

 So as shareholders, as investors, people have the opportunity to engage the companies they invest in and force their views to be heard. And so, markets are making distinctions and acting on areas where, as I say, the politics may not be ready yet. And so that's forced companies to be highly engaged in understanding what their stakeholders think about particularly strong, pervasive issues. And climate is probably number one on that agenda. So I think we'll see more of this. It's not a bad thing, but it is a requirement then that companies be well attuned to the issues and not just simply jump on a bandwagon.

There's got to be a very meaningful engagement. So yes, if your company wants to take a position on something, you need to think it through well, you need to think through the consequences and understand not just the consequences, but the consequences of the consequences.

Jump on a bandwagon and it will take about five minutes for someone to spot that you've done that and to call you out on it. And the damage to your reputation from being called out on something when you've jumped on a bandwagon is probably a lot more and a lot faster than your perceived inaction or inactivity or that you're just too slow to respond.

So my counsel to companies is understand where your stakeholders are, what they're thinking and what's driving them. and think through your actions very carefully.

They must map to strategy. The market is looking for behavior that can be measured, that can lead to change, and above all is consistent with what the brand stands for. And companies that do that will find that their brand value will increase over time because they'll be seen as connecting with their stakeholder base.

More recently in the US, we've seen CEOs come out and adopt the view of stakeholder capitalism that tends to have been prevalent in Europe, in Asia, and particularly with family businesses where people have had to think a lot more than just about profit. They've had to think about the communities in which they do business, the communities they serve and this, to me, is just good business sense. You know, for business to be sustainable, business has to operate in an environment where it can thrive. And it can only thrive where the communities in which it operates are also thriving. So short -term profitability and long -term pain for the community is not a sustainable business and ultimately we all want our businesses to be sustainable so that they last for the for the generations ahead.

Yeah, that makes good sense. I want to go back a little bit You mentioned that companies should definitely understand the risks involved with taking a stand on a political issue That probably comes with some preparation and planning because when a company gets into a situation where they need to make that decision, I suppose it has to happen in a fairly timely manner. Do you suggest doing some scenario planning or some sort of preparation to make those decision processes go quicker?

So the first thing I think that companies need to think about is aligning their views on a particular issue of the day to their overall strategy. If at that point you look at the issue of the day and say well there's actually no intersection on this issue with our strategy, then why are we sucking up oxygen in this debate?

The point here is when you take a position on something you will be held to account, so you better think it through, you better plan it, you better scenario plan. For example, some companies that are at the intersection of significant areas of impact of climate change, will need to take positions on what their businesses are going to look like in 10, 20, 30 years time. And those companies are companies that will need to think through very carefully what the implications of taking those positions are. And think about the engagement you have with your stakeholder community. I like the idea that companies will engage me in a conversation. They also have to listen. It's not just about telling me what they think I need to hear. What's the process by which the company is listening to the views of its stakeholders, its employees, its shareholders, its supply chain and supplier base, its customer base and so on. Do you have a process that you can very consciously listen to what's coming through that feedback chain?

Not always do companies get that right. So one of the things that we do quite often see is the companies criticised for, you haven't listened to me, you haven't listened to my part of the story. And I really like when a company says, I don't have all the answers, but I want to work with others across our stakeholder base to achieve an outcome that brings together a meeting of minds or the benefit from a number of different opinions.

If you take a position very early and you don't listen to the person you're talking to, then the conversation is not a successful one and it's not a pleasant one.

Absolutely. That's really good advice. Listen and make sure you actually incorporate what you're talking about. are saying into your decision making and make that sort of visible, I suppose.

And then explain it well. You know, don't explain it with corporate jargon. Make your explanations very relatable and understandable. I see companies have a natural tendency sometimes to drift into the language that they know and they're very comfortable with because that's their base.

One of the things that I have a spent a lot of time on, particularly with Temasek, is that if you look at the annual report Temasek does, it's very accessible.

It's easy to write a long story. It's very hard to write a shorter, more succinct explanation and convey messages, but we spent a lot of time on that. And I think making sure that explanations are coherent and easy to understand, easy to digest, but also not oversimplified that you're taking your audience for granted. I think those are things that are really important.

That makes sense. I also like what you said about that you like companies who say they don't have all the answers, that they're working towards some sort of a long term goal. They're not going to be able to deliver all the answers overnight. And I also know that Airbus is working on some pretty ambitious long -term projects right now. Is that the approach that you guys use when you're engaging your stakeholders in those longer -term ambitions?

Absolutely, and look, I'm quite new to this business, but I saw a natural alignment there because aviation is a carbon -intensive industry. The reality is that in order to fly people around the world we have to use carbon emitting fuels because the science, the technology isn't yet there to do so at a commercial level using non carbon based fuels just yet, which is where we come in. We have adopted a view that we really want to find Pathways to decarbonise our industry

It is ambitious, it's going to be expensive, it's going to take time and it's going to require science and technology to intersect with the right business propositions, whether it's sustainable aviation fuels, whether it's new efficient aircraft technology and design, improved air traffic management standards and potentially in the long term, hydrogen as a new fuel source for aviation. Each of these steps is something we're spending time on, and each of these steps, we're working with a very broad base of stakeholders around the world to try and achieve. We're investing in something that may not land or come to fruition in my lifetime, but it's just so essential that we do it.

Plenty of other companies are doing this in their space. Naturally, we're all being held to account by community groups and others that are watching for those that over embellish their story and seek to greenwash or trade using that ambition. And I speak here about any company that's advancing the case of what it's like in a decarbonized world, in a socially cohesive world.

Don't over embellish. Don't underestimate the challenge. And I don't. On decarbonisation, the challenge is enormous. I can't wave a magic wand and fix it. And I think most people out there are very reasonable and understand that.

They want to see that we're making the right steps. This is money that is hard earned by what we do today, investing in changing the business for the future for the betterment of our industry and our planet. These things are important, but we have to show along the way the steps we're taking. Sometimes the challenges were not successful at meeting and overcoming. And look, I would say in any ambition like this, if we set out an ambition and achieved everything easily, then we haven't pushed ourselves far enough. We haven't pushed ourselves fast enough or far enough.

But let's keep in mind that fundamentally, most companies are actually looking to try and make the world in which they operate a better place for them, their customers and their suppliers and staff and so on.

And I think as long as the checks and balances are right, and I like the fact that we're actually all held to account by various external parties, I come back to one of the opening points I said, we've democratized information and by democratizing information, we've given everyone the ability to be a check and balance on us.

A company shouldn't be afraid of that, should learn how to work with it, but also be open to having candid conversations about the progress it's making on some of these big, challenging issues for the future.

I think that's so right what you're saying about having candid discussions. But I also like how you started out talking about the challenge. Just acknowledging the enormity of the climate challenge for Airbus specifically, but I guess for everyone in the industry. And I feel like that's a step that a lot of companies kind of skip, like they'll talk about what their efforts are without actually addressing, you know, what the overall challenge is that they're they're trying to chip away at. And I think that really helps toward the credibility as well because that's also part of the story of, well, we don't have all the answers yet, but we acknowledge what the challenge is and we're going for it with whatever we can. Does that resonate with you at all?

Yeah, it does. I think if I think about the challenge on decarbonizing aviation, when I worked for an airline about 10 or 15 years ago, I could confidently say that aviation represented less than 2 % of global emissions. So we were small. That's now 2 .4 or 2 .5%. Now, I could still argue that as an absolute number, it's still quite small, but what's the trend here? The number's going up for two reasons. One, growth. Two, as other industries are decarbonising, we're not. So our share of the pie will get bigger. And that's because the science is slower on aviation decarbonisation than, for example, it is on land transport where you can drive electric vehicles, charge them with solar energy and so on, so you take immediate decarbonisation steps. Aviation is very complex because fundamentally, everything we do comes back to making sure that people can travel safely.

So even when we develop new fuels, the testing and certification process is understandably gonna be long and complex. One of the great things about the aviation industry is that we're constantly learning from the near misses, or the potential for disaster. We have a very good, very robust system within the industry to share those learnings, whether it be across competitors or from within our own businesses.

So ourselves and Boeing are obviously very robust competitors. We compete hard for every aircraft sale that we make. On safety, the alignment between us is really, really strong. The same thing is going to happen when it comes to sustainable aviation. We're gonna make sure that we take steps, but the steps will also be measured and checked and certified by the external regulators, but it doesn't absolve us of the urgency and the need to move ahead at great speed because 2 .4 % is not good enough. We need to get that number down. We need to get that number eventually to zero and it may take a long time to get there But our ambition is to get us there.

Wow. I mean, it sounds like you have a really fascinating role right now. Lots to work towards and it also sounds like you're fairly..

Every role is interesting

Every role has its own interesting bits, right?

Yeah, and well, I was gonna say you also sound like a pretty optimistic guy. You're really working toward something that you believe in. When you look to the future, given the state of where we are, everything you talk about with there being a bit of a political void and the proliferation of information, and obviously the climate challenge, what gives you the most hope?

I think, without being too cavalier about it, that every generation coming through feeds that ambition and is an incredibly smart generation of people. And if I look at those who are coming into the workforce now,  they have skills far beyond what we all did when we joined the workforce. I think we have really clever people, innovative people who will find solutions to problems. The great thing about an entrepreneurial environment is that you will find that there are going to be plenty of people out there that will have big bold ideas.

The democratization of information, one of the many benefits of that, is people's constant ability to learn and keep in touch with each other and share and promote their ideas.

And so solutions are going to be very important. be there and they'll be found instead of by big companies, sometimes they'll be found by a 16 year old, on a PC working in their bedroom at home.

So I'm really confident that we will find solutions to challenges.

I worked with a boss years ago who said to me, "No man -made problem is immune from a man -made solution." We just have to find it. And so the finding it is hard, but it's possible. I get that there's whole questions about commercial viability, cost, and all of that disruption to existing systems, dislocation of labour, the social challenges that come with it. They are issues we're going to have to tackle. But fundamentally, I think if we find the solution to a problem and I think we do have options where we see solutions to climate change, it will you know in part be addressing some of those big social by -product questions that arise from making the hard calls around energy transition for example but we can get there and I'd like to think that we will.

Well I think we're just going to leave it there. Thank you so much for the conversation. It's been really fascinating.

Great pleasure. Thanks, Toni.