Top-flight CEO Communications Prompts Strong Corporate Growth [New Research]

Fast-growth companies are virtually synonymous with CEOs who prioritize communications as part of their responsibilities, new research shows. Of the 100 top-performing companies evaluated, the vast majority (81%) are led by CEOs who consistently communicate and have a distinct brand, according to research by FTI Consulting.

FTI Consulting evaluated the communication style of the 100 companies with the highest growth rate in their share price between Jan. 1, 2015, and Dec. 31, 2019, across three indexes (S&P 500, FTSE 250 and Euro Stoxx) and searched for specific characteristics of the CEO’s communications. Follow-up research examined how the share prices of the fast-growing companies were affected by Covid-19 and compared it with their industry peers.

Key Corporate Communications Findings

Main takeaways include:

Stock prices of companies where CEOs who had already recognized the importance of communication fared much better during the Covid-19 pandemic than industry peers by an average of two percent. That stronger investor confidence translates into $260 billion in additional shareholder value.

Of the CEOs who value communications highly, nearly 40% can be considered “stakeholder CEOs” or CEOs who have publicly taken a stance on social or political issues not directly related to their business.

While healthcare sector CEOs, are traditionally viewed as less vocal than leaders of consumer-facing companies, the growth leaders in healthcare bucked this perception. Of the 22 CEOs of the fastest-growing healthcare companies evaluated, 19 were vocal and had a personal brand.

Although American CEOs more frequently take stands on controversial issues, European leaders are no less vocal. In fact, the Euro Stoxx index had the largest share of active vocal CEOs.

All female CEOs considered communication an important part of their leadership. Of the 128 CEOs evaluated, only six of them were women (4.7%). All had a distinct brand and communication style.

Steps to Gain Benefits from Corporate Communications

FTI Consulting offers these recommendations:

Make communications a board-level consideration rather than relegating it to the operational level under the chief marketing Officer. When seeking CEOs, boards can consider candidates’ ability to communicate, inspire confidence among stakeholders and other soft skills in addition to their hard skills.

Choose the channel and voice that is most authentic to the CEO’s communication style. Find a communications channel that allows leaders to speak transparently and consistently.  Channels can include owned corporate or brand websites, op-eds in traditional media including trade publications, industry association presentations, and social media. Analyst quarterly meetings have also become a forum for taking positions on social issues.

Focus more, not less on communicating during turbulent times like the COVID-19 pandemic. As many questions and uncertainties impact confidence during such times, it’s important that leaders share the information they have.

Use communications to differentiate the company from competitors. Communicative leaders outperform their peers, regardless of geography, sector and the nature of services or products. Leaders don’t need to seek out controversy or communicate nonstop, and strategies of B2C companies don’t necessarily work for B2B companies. However, regular communication tailored to the specific industry bolsters confidence and support from employees, shareholders and customers.

Research and Planning Reduces Risk

Many PR and corporate communications experts warn that CEOs who imprudently comment on controversial issues expose their companies to reputational damage and lost sales. Companies can minimize those risks and win customer loyalty through careful research and planning. Corporate communications professionals can play a leading role in advocating for and promoting their organization’s social responsibility contribution to society.

“Before you speak, write or engage with your community, listen and observe trends,” advises Kristie Byrum, assistant professor of public relations and media law at Bloomsburg University of Pennsylvania. A social media monitoring tool can monitor sentiment toward specific topics and reveal myths and misperceptions about how consumers and other key stakeholders feel about the brand and its key messages. The CSR program can be adjusted to emphasize campaigns that resonate.

Bottom Line: Most CEOs of fast-growing companies place a priority on their communications with key stakeholders. It follows that business leaders with strong communications skills give their organizations a competitive advantage.

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