Reputation Gurus

The trend of activist shareholders trying to force change in an organization has gained significant momentum.  It’s not new … Calpers (the activist Califorian pension fund organization) blazed this trail decades ago, but others are getting more aggressive and they’re out to win.  HSBC is the latest target (to improve corporate governance and evolve their strategy to focus on emerging markets), but companies like Home Depot have been targeted by activist shareholders like PETA (in which case, there’s an NGO buying stock so that they can make change), and other examples are becoming more frequent.

I am not an IR expert, so I’ll leave the IR commentary to others.  However, it’s clear that activist shareholders can clearly have an impact on a company’s corporate reputation, and that’s, of course, where my interest kicks in.  Just the mere thought that an activist shareholder is demanding change makes it to the front of the FT — including a story today (in HSBC’s case) that outlines all of the shareholder concerns. 

Part of me wonders what it would be like to become an activist shareholder — to be someone who can go in and rattle enough chains to make a company completely change the way it operates … if they’re successful.  A smart corporate reputation manager, though, would know what those changes should be before an activist gets wind of what might need to be changed … and a smart CEO and executive board would make those changes proactively.

This is where listening closely to a wide range of influencers comes in.  The ability to predict what might need to be changed — to understand the changing expectations of a variety of stakeholders – is key to being nimble enough to make changes before an activist shareholder group targets you.  Some may say that this is the job of the IR people, but it’s not.  It’s the job of the lead person in charge of the company’s reputation.