Handbook on Responsible Leadership and Governance in Global Business
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Handbook on Responsible Leadership and Governance in Global Business

Edited by Jonathan P. Doh and Stephen A. Stumpf

Ethics, social responsibility, leadership, governance. These terms are heard in the classroom, in the boardroom, and viewed on the front page of newspapers and magazines. Yet serious attention to the relationships among these concepts is lacking. Although commitments to leadership, ethics, and social responsibility are evident, individuals and companies are falling short in combining these duties into policies and cultures that guide behavior and decisions. The missing element is a broad-based and integrated approach to responsible leadership and governance. This volume provides the leading thinking on these issues and includes a discussion of emerging areas that require future attention.
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Chapter 4: The Leadership Challenge: Building Resilient Corporate Reputations

Charles J. Fombrun


Charles J. Fombrun It is a terrible thing to look over your shoulder when you are trying to lead – and find no one there. (Franklin D. Roosevelt) Introduction The corporate scandals of 2001–4 made household names out of previously large but relatively obscure companies like Enron, Worldcom, Tyco, Adelphia and Arthur Andersen. Most of these scandals can be traced to deficient organizational cultures that placed individual self-interest above the institutional interests they were hired to defend. They point to a fundamental flaw in late 20th-century models of organization that spurred executive hubris, promoted celebrity over leadership and, in the process, dramatically failed to serve the interests of employees, investors and customers. In this chapter, I suggest that organizations with responsible leaders at the helm are those that value reputation and manage them as rent-producing economic assets. Drawing on original research conducted by the Reputation Institute, a private research group I founded in 1999, I demonstrate that well-regarded companies rely on a model of leadership that recognizes the interests of multiple constituencies, values how well these constituencies are served, monitors their perceptions and expresses itself to them abundantly, consistently and with authenticity and transparency. Reputation: a crossroads of literatures A corporate reputation is a collective representation of a company’s past actions and future prospects that describes how key stakeholders interpret a company’s initiatives and assess its ability to deliver valued outcomes (Fombrun, 2001). This definition is rooted in convergent perspectives advanced by economists, strategists, organization theorists and marketers. To...

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