58% of Global Executives Say Home Country is a Critical Stakeholder on Par with Customers and Shareholders

NEW YORK, Aug. 3, 2021 /PRNewswire/ -- Nearly six in 10 multinational business executives (58%) say their company's home country is a "very" important stakeholder to their business, second only to customers (63%) and equivalent to shareholders, according to Home Country as Stakeholder: The Rising Geopolitical Risk for Business Leaders, a first of its kind study from the Geopolitical Strategy & Risk Group at leading global communications firm Weber Shandwick.

The global survey conducted by Weber Shandwick, in partnership with KRC Research, asked 1,217 senior executives in 12 countries¹ about their perceptions of the relationship between a multinational company and its home country, defined as where a company is headquartered, along with the reputational risks and opportunities.

The study reveals that nearly all executives (97%) believe it is important – 62% say "very" important – for multinational companies to make business decisions that consider the company's home country interests. In nine of the 12 markets surveyed, home country rates as a top three "very" important stakeholder for business. Most executives (88%) believe that both the government and the public in their home country expect them to take the national interest into account. The importance of the national interest is rising as six in 10 executives (63%) expect multinational companies to give more consideration to their home country's interests over the next five years.

"Home country is no longer an unspoken stakeholder," said Michelle Giuda, Executive Vice President of Geopolitical Strategy & Risk at Weber Shandwick. "As corporate leaders reset their strategies for a new geopolitical and post-COVID era, they are considering how they deliver and communicate value to their home country stakeholder. Executives are saying corporate responsibility includes national responsibility, and leaders must plan accordingly."  

Fifty-six percent (56%) of executives rate national security as "very" important to their companies' business decisions, surpassing diversity and inclusion, the protection of human rights, ESG², and climate change as important decision-making factors with 50% or fewer of all executives citing each of these as "very" important.

Among the list of 16 factors executives were asked to rate by level of importance to company decision-making, national security is top ranked among Indian and Chinese executives, with 75% and 67% reporting it as "very" important, respectively. National security also rates among the top five "very" important decision-making factors by executives in Canada and the UK. Executives in the U.S. rate cybersecurity at the top of "very" important business decision factors while national security rates ninth. 

What Comes First – Bottom Line or National Interest?

The survey uncovers a striking business challenge. Eight in 10 executives (80%) agree that, regardless of national interests, a company has a responsibility to do what is in its own best interest to succeed. Yet, a company's best interest is not absolute. Many executives also agree (83%) that in some instances, national security or national economic interests should be prioritized over the company's bottom line.

The prioritization of company versus country varies across markets and is particularly relevant considering that 71% of the 45 newcomers to the 2021 Global Fortune 500 list are non-U.S. companies. Chinese and Indian executives are the most likely to index toward prioritizing country interests first while Swedish, German and UK executives are more likely to index toward placing company interests first.

Weber Shandwick asked executives to explain in their own words how a multinational company can or should protect or advance its home country's national interests. The top categories of responses include: 

• Lead and compete to grow jobs and the economy at home first (37%)
• Partner with the government – federal, state and local (17%)
• Protect – data, privacy, technology and intellectual property (13%)
• Comply with national laws and regulations (11%)
• Operate ethically (11%)
• Bolster the image/reputation of your home country abroad (9%)

Executives Prepare to take a More Public Position on Geopolitical Issues Despite Concern over Risks, Lack of Preparedness

The vast majority of executives (87%) agree – 44% "strongly" agree – their companies should be prepared to take a more public position on geopolitical issues over the next five years.

"Business leaders have been speaking up on domestic issues with increased fervor," said Gail Heimann, CEO of Weber Shandwick. "Now the rising importance of home country and competing national priorities and values is compelling leaders to prepare to raise their voices on international issues and challenging them to choose when to put the company or country first. Our study underscores how central this tension is to our clients' strategies."

The list of issues potentially requiring executives to speak out on is long and complex. Among several geopolitical issues of concern facing multinational companies, executives are most likely to say they are "very" concerned about pandemic/public health crises (56%), cyber attacks (56%) and data privacy (55%). Rounding out the top five geopolitical concerns are threats of an economic downturn (53%) and supply chain disruption (50%). Nearly half (49%) of executives say their company is also "very" concerned regarding disinformation about their company, followed by climate change (45%), trade disputes/embargoes (45%) and human rights violations (44%).

Preparation is imperative since 41% of executives also report that they expect their vulnerability to geopolitical risks to grow, and many are not prepared: 74% say their company is more reactive than proactive when it comes to geopolitical risk, and 55% and 56%, respectively, say their company's Board of Directors and senior leaders are not well prepared for geopolitical risk.

Principles for Building Reputation Resilience Amid the Rise of the Home Country Stakeholder

Weber Shandwick's Geopolitical Strategy & Risk Group recommends the following guidelines to build reputation resilience amid the rise of the home country stakeholder:

• Know what your national stakeholders expect. Gather the right intelligence to understand how constituencies within your company's home country – including customers, employees, communities, investors, media, and government and local officials alike – expect your industry, company and its leaders to advance or protect the national interest. Incorporate relevant questions into existing surveys or implement new, ongoing polling for comprehensive insights that inform both global and local messaging.
• Anticipate if, how and when you will take a public position on geopolitical issues. Leverage data analytics as well as subject matter expertise for line of sight into emerging geopolitical issues and narratives across the markets and information space in which you operate. Create a framework to assess the issues on which you have a mandate to speak out publicly and plan for when and how it is appropriate to do so. Eighty-nine percent (89%) of executives agree – 51% "strongly" agree – that geopolitical risks not carefully managed can harm corporate/brand reputation. Ensure communications leaders have a seat at the table alongside the CEO and board members to properly anticipate and prepare for reputation risks and opportunities.
• Assess your company versus home country priorities and business risks. Make sure your company has a foreign policy and know how it aligns, or not, with that of its home country. Establish a cross-region, whole enterprise task force with internal and external advisors as a governance mechanism to regularly anticipate the issues that create tension between company and home country priorities. This includes examining the company's exposure in key markets as geopolitical issues arise, and the potential business cost of speaking out or taking action.
• Anchor your actions and message in your values. Fifty-two percent (52%) of executives "strongly" agree that their company's core values align with their home country's national values. Proactively demonstrate how these shared or complementary values guide company decision-making and public positions on critical geopolitical issues to best advance or defend your position.
• Communicate your national – and international – impact. Showcase ways in which your company is advancing the interests of its home country, in addition to its own financial interests and the company's value-add in all markets of operation. Be mindful of how this impacts the perception of your company across its global footprint. Communications should highlight shared interests and values where possible, while recognizing and managing differences, disagreements and potential conflicts. Diplomacy is required.
• Be mindful of your employees. Employee retention and talent recruitment can be at risk as geopolitical tensions arise. Eight in 10 executives (82%) agree that increasing tensions between countries could negatively impact the commitment of employees outside of the company's home country. And 77% agree increasing tensions between countries will make it more difficult to recruit talent outside of their company's home country. Work closely with your C-suite officers and local HR heads to consider concerns of non-home country employees. 

For more information and to review the full Home Country as Stakeholder report, click here: https://www.webershandwick.com/news/research-finds-home-country-top-three-business-stakeholder

About Weber Shandwick
Weber Shandwick is a leading global communications network that delivers next-generation solutions to brands, businesses and organizations in major markets around the world. Led by world-class strategic and creative thinkers and activators, we have won some of the most prestigious awards in the industry. Weber Shandwick was named to Ad Age's Agency A-List in 2020 and Best Places to Work in 2019. Weber Shandwick was also honored as PRovoke's Global Agency of the Decade in 2020 and PRWeek's Global Agency of the Year in 2015, 2016, 2017 and 2018. The firm has earned more than 135 Lions at the Cannes Lions International Festival of Creativity. Data-led, with earned ideas at the core, the agency deploys leading and emerging technologies to inform strategy, develop critical insights and heighten impact across sectors and specialty areas, including brand and B2B marketing, healthcare marketing, change management, employee engagement, corporate reputation, crisis management, data and analytics, technology, public affairs, social impact and financial communications. Weber Shandwick is part of the Interpublic Group (NYSE: IPG). For more information, visit http://www.webershandwick.com

About KRC Research
KRC Research is a global nonpartisan insights-driven opinion research consultancy that turns data into intelligence to help our clients solve challenges. A unit of the Interpublic Group of Companies (NYSE: IPG), KRC Research offers the quality and custom service of a small firm with the reach of a global organization. Staffed with multidisciplinary research professionals, strategists, and investigators, KRC has worked for over 30 years provide insights to corporations, governments, not-for-profit organizations, and the communications firms that represent them. Our subject matter experts have deep experience in research methods applied to communications, public health and marketing campaigns, corporate and brand reputation, and consumer, stakeholder, and employee engagement. For more information, visit www.krcresearch.com

About the Research Method
Weber Shandwick, in partnership with KRC Research, conducted an online, global multi-market survey among 1,217 multinational business executives in 12 countries between February 18 to April 5, 2021.

All executives surveyed are members of the C-suite or report directly to the C-suite, lead large-sized multinational companies that generate a minimum of $500 million in annual revenue, and have a minimum of 500 employees. In Canada, Mexico, Singapore and Sweden, the revenue and employee size requirements were lowered to a minimum of $250 million in annual revenue and a minimum of 250 employees to include executives working in countries with smaller average business sizes since fewer multinational companies are based there. All respondents live and work in the same country as where their company is headquartered, and for most, that is also the country of their birth.

The survey was conducted online in the main languages of each country. We sampled approximately 100 executives in each of the following 12 countries:

¹ Survey conducted in Brazil, Canada, China, Germany, India, Japan, Mexico, Singapore, South Korea, Sweden, United Kingdom and United States
² Environmental, Social and Governance

Contact: Jill Tannenbaum
Company: Weber Shandwick          
Phone: 212-546-7815
Email: [email protected]

SOURCE Weber Shandwick

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http://webershandwick.com

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