Chris Clark interviews leading corporate directors and governance experts for Stuart Levine & Associates, a global consulting and leadership development company. The Planet Governance® interview series features the views of corporate directors, chief executives, and governance experts on issues from succession planning to executive compensation to reputation risk.
This highly engaged CEO says a company’s reputation is one of its most significant assets, often of equal importance to its tangible, physical assets…
Sameer Somal is the CEO of Blue Ocean Global Technology and Co-Founder of Girl Power Talk. Sameer leads client engagements focused on digital transformation, risk management, and technology development.
Sameer is an active member of the Board of Directors of Future Business Leaders of America, Abraham Lincoln Association (ALA), American Bar Association (ABA), International Trademark Association (INTA), and Society of International Business Fellows (SIBF). A graduate of Georgetown University, he held leadership roles at Bank of America, Morgan Stanley, and Scotiabank. Sameer is also a CFA Institute 2022 Inspirational Leader Award recipient and was named an Iconic Leader by the Women Economic Forum.
Sameer Somal
Chris: Sameer, it’s great to chat with you today. Cutting to the chase, do you have a governance guiding principle or role model?
Sameer: Thanks Chris, the feeling is mutual. Abraham Lincoln’s timeless words, “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time,” resonate profoundly in the context of corporate governance. Effective governance demands integrity, transparency, and accountability because businesses are ultimately judged not just by their financial performance but by their ethical practices and impact on stakeholders. Deceptive practices or short-term gains achieved through unethical means may yield temporary success, but over time stakeholders-including shareholders, employees, customers, and regulators – inevitably uncover the truth. This underscores the necessity for corporate leaders to uphold high standards of conduct, ensuring that decisions are guided by what is right rather than what is convenient. Doing so not only builds trust but also fosters sustainable success, reflecting the principle that long-term credibility outweighs fleeting advantages.
Chris: In today’s digital age, a single misstep can unravel years of back-breaking work, understanding the landscape of reputation management is paramount. In that light, why is reputation considered a critical driver of valuation and growth in today’s digital marketplace, and how should board members prioritize it within their governance strategy?
Sameer: A company’s reputation is one of its most significant assets, often of equal importance to its tangible, physical assets. How consumers and the public view an organization has always proved important, but in the digital age, reputation is no longer a passive attribute but a pivotal driver of valuation and growth. The rise of social media, online reviews, and real-time communication have magnified the importance of corporate reputation, making it a measurable and impactful contributor to company value. A strong reputation can bolster a company’s financial performance, attract investors, and drive customer loyalty, while a tarnished reputation can lead to revenue loss and even market cap erosion.
Research consistently highlights the tangible benefits of a positive reputation. As consumers increasingly consult reviews and social media pages before deciding which products and services to purchase, perceptions directly impact a business’s bottom line. For instance, the Edelman Trust Barometer (2024) reveals a strong correlation between trust and financial performance, with trusted companies outperforming their peers in consumer purchases and retention. In this context, board members must view reputation not as an ancillary concern but as a core governance priority.
Integrating Reputation into Governance Strategies
As brand reputation becomes increasingly critical to financial performance, companies can no longer afford to sit idly by and hope that consumers develop trust in their brand. To prioritize reputation, boards must integrate reputation management into their governance frameworks. This requires a multifaceted approach:
1. Reputation as a Risk and Opportunity Metric: Boards should recognize that reputation influences not only risk management but also opportunities for growth. Monitoring reputation as an intangible asset ensures that it aligns with business objectives and stakeholder expectations.
2. Focusing on ESG (Environmental, Social, and Governance): Employees and customers have never been more socially and ethically engaged, and therefore ESG factors are increasingly tied to reputation. Companies committed to ESG build stronger reputations, fostering customer loyalty and attracting the top talent to their organizations. As the World Economic Forum notes in its 2024 Global Risks report, companies that adopt responsible business practices and investment decisions will win reputational and performance benefits. Board members must oversee ESG initiatives and ensure their alignment with corporate values and market trends.
3. Appointing Reputation Advocates: Boards can designate a Chief Reputation Officer or assign a specific committee to oversee reputation-related issues, ensuring accountability and a structured approach.
Scenario Planning and Proactive Engagement
Reputation governance requires foresight. Scenario planning for potential crises—such as cybersecurity breaches or public relations controversies—can enable swift and effective responses. Boards must also ensure that management fosters open communication with stakeholders, building trust through transparency. Tools like reputation dashboards can provide real-time data on public sentiment, enabling proactive rather than reactive measures.
By prioritizing reputation as a strategic asset, boards can drive valuation and long-term growth while safeguarding against reputational risks.
Chris: What role does digital reputation play in aligning corporate goals with stakeholder expectations, and how can board members effectively oversee this alignment?
Sameer: Digital reputation serves as a critical bridge between corporate goals and stakeholder expectations. Gone are the days of simple shareholder relations. We are in an age of stakeholder capitalism—the belief that businesses should serve broader societal interests beyond shareholders. Reputation has become a key mechanism for aligning corporate vision with public trust. A well-managed reputation not only reflects corporate values, but also fosters stronger relationships with customers, employees, investors, and communities.
Reputation as a Feedback Loop
In today’s interconnected world, digital platforms provide a continuous feedback loop, revealing how stakeholders perceive a company’s actions and values. Social media, online reviews, and forums allow stakeholders to voice their expectations in real time, enabling companies to gauge alignment with their corporate goals. For example, some directors track social media discussions to assess their companies’ reputations (PwC, “2024 Global Board Survey”).
Chris: Sameer, please share some practical digital reputation tips with me regarding the Board’s role in oversight.
Sameer: Quite simply, to oversee this alignment, boards must focus on three primary arenas.
1. Establish Stakeholder Engagement Protocols:
· Boards should guide the process of developing a brand values statement and seek feedback from stakeholders to understand what values are important to particular groups. Regular engagement through surveys and town halls can help boards understand stakeholder priorities, ensuring that a company’s goals remain aligned with its reputation.
· Boards should encourage management to use digital tools for monitoring stakeholder sentiment, such as social listening platforms or sentiment analysis tools like Brandwatch or Meltwater. This helps ensure a unified message that accounts for the viewpoints of customers, employees, investors, and other stakeholders.
2. Emphasize ESG and Transparency:
· Corporate goals tied to ESG initiatives – such as reducing carbon footprints or improving diversity and inclusion – should be clearly communicated to stakeholders. Transparency builds trust, and boards must ensure that reporting on ESG metrics is accurate and accessible (CEOs on ESG Best Practices, Thompson Reuters, 2024).
3. Monitor Digital Platforms for Alignment Gaps:
· Boards can use dashboards to track real-time data on stakeholder sentiment and digital reputation. This enables the identification of alignment gaps and allows the organization to implement corrective measures swiftly to minimize any potential damage to brand reputation.
Governance Best Practices
Effective governance involves adopting a proactive stance on reputation alignment:
· Evaluate Communication Policies: Ensure that the organization’s public-facing communications consistently reflect corporate values and goals. Misaligned messaging can lead to reputational damage and stakeholder distrust.
· Leverage Third-Party Audits: Independent audits of digital reputation metrics can provide boards with an objective view of stakeholder alignment.
By actively overseeing digital reputation, boards can ensure that corporate goals remain attuned to stakeholder expectations, fostering trust and long-term success.
Chris: How can boards proactively monitor and address reputational risks, especially in an era where digital crises can escalate rapidly?
Sameer: In the digital era, reputational risks can arise and escalate with unprecedented speed, often driven by social media amplification or data breaches. Boards must adopt a proactive approach to monitoring and managing these risks, emphasizing agility, responsiveness, and foresight.
Nature of Reputational Risks
Reputational risks often stem from factors such as:
· Digital crises: Cybersecurity breaches, misinformation campaigns, or viral social media backlash.
· Corporate behavior: Misalignment between stated values and actions, leading to public distrust.
A 2024 Deloitte survey shows that three in four corporate affairs (“CA”) directors serve on their company’s executive committee, a sign of the prominence that reputation plays. The same survey said that CA directors rank corporate reputation as their number one concern.
Proactive Monitoring Mechanisms
To mitigate reputational risks, boards must:
1. Leverage Technology for Real-Time Monitoring:
Use AI-driven tools to track online mentions, sentiment analysis, and emerging trends. Platforms like Meltwater and Talkwalker provide insights into potential crises before they escalate.
2. Implement Early-Warning Systems:
Boards should establish systems that flag potential reputational threats, such as negative sentiment spikes or unusual activity on digital platforms.
Crisis Management Readiness
Preparation is key to mitigating reputational damage during a crisis. Boards must:
1. Develop Crisis Communication Protocols:
· Ensure the organization has a clear, actionable crisis communication plan. This includes designating spokespersons, drafting template responses, and conducting regular drills for responding to reputation crises.
· Emphasize speed and transparency. Delays or perceived dishonesty can exacerbate crises.
2. Test Incident Response Plans:
Boards should conduct simulations of reputational crises, assessing the effectiveness of response strategies and identifying areas for improvement.
Balancing Positive Reputation and Good Corporate Behavior
While good corporate behavior forms the foundation of a positive reputation, they are not always synonymous. A company may behave ethically yet suffer reputational harm due to perception gaps or external factors. Conversely, some companies with positive reputations may engage in questionable practices that eventually surface.
Case Study:
· Ethical Behavior with Perception Gaps: Companies with ethical practices but poor communication strategies may encounter lapses in public trust. In 2017, Adidas was criticized for an email marketing campaign aimed at congratulating Boston Marathon participants, but the language in the message was perceived as insensitive to victims of the deadly bombing attack at this event several years prior. By addressing this PR crisis swiftly, Adidas avoided permanent damage to its brand reputation.
Boards must ensure that positive reputation is reinforced through consistent, transparent communication and not merely assumed based on corporate behavior.
Governance Recommendations:
· Foster a Culture of Agility.
· Conduct Regular Reputation Audits.
· Integrate Reputational Risks into ERM Frameworks.
By proactively monitoring and addressing reputational risks, boards can safeguard the organization’s reputation and resilience, ensuring long-term stability and growth.
Chris: Sameer, what are the most common themes and issues that boards should address?
Sameer: Great question, Chris.
One theme is social and public policy in the boardroom. While not traditionally a top priority, integrating public policy considerations into governance frameworks enhances reputation and aligns with expectations. By weaving public policy into governance decisions, boards can boost their company’s reputation by showing stakeholders they are in tune with societal values. Boards must view these elements as essential to building trust.
A second theme is receptivity to insights and agility. The most successful boards stay adaptable and embrace new ideas. This mindset is especially important in a fast-moving area like digital reputation, where challenges—and opportunities—can appear overnight. Boards must remain open to fresh perspectives and adaptive strategies. This includes leveraging technology and external expertise to navigate the complexities of digital reputation management.
A third issue is reputation vs. corporate behavior. Good behavior is foundational, but positive reputation requires active cultivation. Boards must actively shape the perceptions of a company by aligning their actions with the expectations of customers, employees, and the public, going beyond good intentions to establish values that are clear and consistent. Boards must ensure that actions align with public perceptions, fostering trust and goodwill.
Chris: Three cheers for good behavior! Thank you for sharing your insights with us.
Chris Clark joined Stuart Levine & Associates as a senior consultant after distinguished tenures at Texas Monthly – The National Magazine of Texas, Capital Cities/ABC, Forbes, and the National Association of Corporate Directors (“NACD”).
He is known for his prominent role in the creation of NACD’s “The Power of Difference”, “The Leading Minds of Compensation,” and “The Leading Minds of Governance” conference series, “The Directorship 100”, and NACD Private Company Directorship.
Chris specializes in corporate governance, including board assessments, brand evaluations, and strategic communications.
