A new edition of our Explain Yourself Index, focusing on US companies, has just been published. David Bowen explains why ‘explaining yourself’ makes such so much sense, and who is doing it best
This week we publish our second Explain Yourself Index. It’s a ranking of companies that are best at … well, explaining themselves, on the web and in social media. The last one, at the end of November 2017, was popular, and there is evidence that we are now tapping even further into the Zeitgeist.
Before I go on, I should say that there is one big difference between this Index and the last. The last one was global, and was dominated by European companies. This time we have decided to concentrate on the US, and have included a sprinkling of Europeans (there is science to the selection – they are those identified by Harris Poll as having very high recognition in the States). We are also looking at an element US companies are particularly interested in: political disclosure.
For those who do not already know, the Explain Yourself Index is derived from our main Index of Online Excellence (a new edition of which is out in a few months’ time). It starts with the metrics in this that are designed to ‘explain’ a company – by which we mean company information, anything to do with reputation management and (new for this edition) how well it presents its non-financial (CSR/ESG) data and political contributions. We then apply a more granular set of metrics to come up with the top 20 performers. It’s an interesting list – download it from our website – for a number of reasons.
Before getting into the detail, why is this so much in the Zeitgeist? In the New Year the Financial Times published a long piece headed ‘Beyond the bottom line: Should business put purpose before profit?’ It was deliberately phrased as a question – there are plenty of people prepared to argue the answer is ‘no’. But as one of the FT editors tweeted at the time, this is definitely a theme for the year.
So, have we moved to a ‘post-Friedman world’? In 1970 the economist Milton Friedman poured scorn on the idea that business should have a social conscience, setting set a nice simple path for bosses to follow for the next several decades. But then Corporate Social Responsibility came along, with its desire to measure those non-financial factors Friedman despised. And in the last few years there has been an epidemic of reputational crises, spreading around the world like wildfire. Add the growing interest in ‘ethical investing’, and we have a trinity of reasons why the Friedman doctrine might be looking somewhat out of date.
CSR and the reputation wildfire have something in common: the internet. CSR reporting grew up with the corporate web, so it is not surprising that the vast bulk of non-financial data is reported only online. And it was social media that fanned the wildfire. In the past you had a decent chance of containing an issue in one country. No longer.
Our research for this Index shows that more and more companies are adapting to this new world.
A big clue is that a remarkable number have transformed their corporate website into a form of online magazine – a place where they can tell their stories, put their points of view across and, crucially, to be seen as a ‘brand’ in their own right – rather than an anonymous background operation.
Look at Johnson & Johnson, which heads the ranking. Its new site is designed above all to explain the company in an easy-to-digest way. Half the navigational links come under an ‘Our stories’ heading, and the core of the site is a giant magazine. It, along with companies such as Coca-Cola, BP and Shell, bring editorial professionalism to a medium that was often, previously, little more than a filing cabinet. I am sad that as far as we know no company has yet appointed an editor with the power to say ‘no’ to colleagues in the name of quality, but I hope we are creeping in that direction.
We also see greater efforts to present companies as ‘good’. This is both defensive – look at Nestlé’s Ask Nestlé for a thorough attempt to confront the many difficult questions thrown at it – and ‘offensive’. By that I mean telling the world about the good things you and your employees are doing. There is no shortage of this ‘good’ – especially in the US, where helping out in the community is an embedded part of the culture – but not all tell these positive stories as well as they might. Those that do, we note, often use blogs – a nicely informal way to tell nicely informal stories. See for example the FedEx or Walmart blogs.
CSR reporting is bounding along. The CSR industry grew up in Europe, and most of the leaders – like BP and Shell – are based there. But things are moving very fast indeed in the US. Ford’s data reporting in its Sustainability Report is as a good as anyone’s.
The special element we added for this report is on politics. This is measured in two halves. First, how easy is it to find how much companies or their employees (through Political Action Committees) are giving to candidates or lobbyists. There is great variation here, with some such as Pfizer taking the job very seriously indeed, while others provide little. European multinationals have something to learn here. It is no longer good enough to say ‘we don’t give anything so we don’t report anything’. First, they should explain that policy and second, if they do lobbying in the US (which they all do), they should provide information on this.
It was fun looking at the other half of ‘politics’ – how many are using the web or social media to get their views across to politicians. Verizon is one of a handful of companies using a set of tools – including a blog and Twitter feed – to do that. But occasionally, very occasionally, a company will put its head well above the parapet. Former Goldman boss Lloyd Blankfein used Twitter to make his views on Brexit clear, and the Amazon blog last summer had a moderately fierce rant against Bernie Sanders.
Finally, why do European companies crowd the top even of this primarily US Index? It comes down, somewhat inevitably, to governance. We only give a few points (five maximum, out of 120) to the usability metric – but if you perform badly there, the knock-on effect elsewhere is likely to be substantial. If we can’t find information on something, we have to mark down the service. European companies nearly all have strong central web teams holding their sites and channels together; few US companies do. But that is changing – Johnson & Johnson has a well coordinated corporate website; so does Verizon. As others follow, that will be reflected in our Index.
- David Bowen
The Explain Yourself Index is the world's most rigorous assessment of companies' use of online channels to explain who they are and what they do. To download a copy of the report, which focused on the United States, please visit our website.
The global Bowen Craggs Index of Online Excellence will be published in May 2019.