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“On warning”: why businesses must improve their reputations

What does the public think about business?

What are the risks if businesses do not improve their reputations?

These are the questions we answer in our report “On warning”: Why businesses must improve their reputations

In her keynote speech at the Conservative Party Conference 2016, Prime Minister Theresa May warned that her government would be taking a much firmer stance against businesses that fail to play by the rules.

She made herself perfectly clear:

“If you’re a boss who earns a fortune but doesn’t look after your staff…an international company that treats tax laws as an optional extra…a household name that refuses to work with the authorities even to fight terrorism…a director who takes out massive dividends while knowing that the company pension is about to go bust…I’m putting you on warning. This can’t go on anymore.” 

According to Rick Nye, Managing Director of Populus’s Reputation & Strategy team, this statement should be viewed as more than simply the early good intentions of the newly formed administration. Rather, it is a change in tone at the heart of Government, which has come as a response to public sentiment. Indeed, three-quarters (74%) of the UK population believe that the government needs to be tougher on business, according to new Populus polling.[1]

Rick argues that May’s government is expressing a “willingness to shake things up in industries, businesses and public services that are not working in the interests of ordinary members of the public”. After all, May finds herself in Number 10 because too few people felt they were being sufficiently supported by the UK’s political and economic set up.

He also notes “if business leaders cannot curb the excesses of big business, governments, emboldened by electorates disenchanted with globalisation, will.” We have already begun to see examples of this, notably the MP-led inquiries into the demise of BHS and the poor treatment of workers at Sports Direct.

It’s also not just the government that businesses are taking stick from; pressure seems to be mounting from all angles. The media in particular are keen to unearth business’ wrongdoings. Take Buzzfeed’s recent investigation into Asos, which tells a tale of “workers treated like machines…exploitative contracts, an overbearing security regime, and stressed workers.”[2] As well as forcing the retailer to make a number of changes to employee contracts, the allegations have caught the attention of MPs. Asos now finds itself among a line up businesses due to be investigated as part of the House of Commons’ Business, Innovation, and Skills select committee’s Future World of Work enquiry.

It is obvious that the government’s change in approach towards business has significant implications for the way that businesses operate. Failure to take May’s warning seriously will lead to government intervention in business affairs and far stricter regulation.

The Prime Minister threw down the gauntlet in her speech. The question now is how should businesses respond? What can they do to avoid a tangle of red tape and very public inquests into their behaviour?

The answer, of course, is to address the public perceptions that have contributed to big business’ poor reputations and triggered the government’s mood swing.

 

[1] Populus interviewed 2,028 GB adults (18+) online between 7 and 8 September

[2] https://www.buzzfeed.com/saraspary/these-asos-workers-are-paying-the-true-price-of-your-order?bffbuknews&utm_term=.gmLV6evm6#.jmVEngOKn

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