Engage and give back to the community in a way that gets at root causes and makes a real difference. Step up and lead on the issues that are related to your business. In addition, boards are not spending enough time on social media. Social media is the hottest topic at almost every governance conference because risk and reputation management is incredibly important.

1. A view from the top
Strategic reputation management
in a digital world

2. Strong brands and reputation matter
Total return to shareholders1
Index
140
Top brand
portfolio1
120
+31%
100 MSCI
World
80
60
2000 2002 2004 2006 2008 2010 2012
1 Portfolio consisting of the 40 top-ranked, listed companies, picked from Interbrand’s "Best Global Brands" report, published each summer
since 2000. Stocks in local currency, equally weighted and adjusted every July 1 st
SOURCE: Datastream; Interbrand, McKinsey analysis McKinsey & Company |1

3. Expectations of key stakeholders will continue rising
NGOs
Superior
performance,
products & service
+
Good global citizen
Media
McKinsey & Company |2

4. People’s willingness to
buy, recommend, work
for and invest in a
company is driven 60%
by their perceptions of
the company, and
only 40% by their
perceptions of their
products.”
Kasper Ulf Nielsen, an
executive partner at the
Reputation Institute
McKinsey & Company |3

5. Trust is foundational to building relationships,
brands and reputation. At its essence is integrity,
authenticity, transparency, and consistency.
McKinsey & Company |4

6. The toughest thing
about the power of
trust is that it’s very
difficult to build and
very easy to destroy.
Thomas J. Watson,
Founder, IBM Corp.
McKinsey & Company |5

7. NGOs remain most trusted institution globally
% trust in institutions
Global
2011 2012
Business 56 53
Government 52 43
NGOs 61 58
Media 49 52
SOURCE: 2012 Edelman Trust Barometer; informed public 25-64 McKinsey & Company |6

8. NGOs remain most trusted institution in the U.S.
% trust in institutions
United States Global
2003 2007 2011 2012 2012
Business 48 53 46 50 53
Government 39 38 40 43 43
NGOs 49 57 55 58 58
Media 28 43 27 45 52
SOURCE: 2007 and 2012 EdelmanTrust Barometer; Informed public 25-64 McKinsey & Company |7

9. Many mature economies saw double digit drop
in trust
How much do you trust business to do what is right?
% informed public
2011 2012 Δ
Global 56 53 -3
China 61 71 10
US 46 50 4
Poland 44 46 2
Russia 41 41 NC
South Korea 46 31 -15
Germany 52 34 -18
Brazil 81 63 -18
France 48 28 -20
Spain 53 32 -21
SOURCE: 2012 Edelman Trust Barometer; Responses 6-9 only on 1-9 scale McKinsey & Company |8

10. Dramatic shifts in credibility over the past year
2012 % extremely or ∆ pts vs.
very credible 2011
Academic or expert 68% -2
Technical expert
in the company 66% +2
A person like yourself 65% +22
Regular employee 50% +16
NGO representative 50% +3
Financial or
industry analyst 46% -7
CEO 38% -12
Government official
or regulator 29% -14
SOURCE: 2012 Edelman Trust Barometer – Percent Informed Public McKinsey & Company |9

11. Consumers trust multiple media sources; Informed public %
2011
social had the biggest increase 2012
How much do you trust each of the following places
as a source of information about a company?
+10 +18 +75% +23
29 32 26
22
14 13 16
8
Traditional Online Social Corporate
multiple media
sources
SOURCE: 2012 – Edelman Trust Barometer; 20 countries McKinsey & Company | 10

12. Technology remains most trusted sector; financial
sector still at the bottom
2012, percent
Technology 79
Automotive 66
Food and beverage 64
Consumer packaged goods 62
Telecommunications 60
Brewing and spirits 59
Pharmaceuticals 56
Energy 53
Media 51
Banks 47
Financial services 45
SOURCE: 2012 – Edelman Trust Barometer; Responses 6-9 only on 1-9 scale; informed public 25-64 McKinsey & Company | 11

13. Many businesses are not meeting Business importance
Company performance
expectations and seizing the opportunity
Listens to customer needs and feedback -31 67
36
Offers high-quality products or services -19 67
48
Treats employees well -37 64
27
Places customers ahead of profits -36 62
26
Takes responsible actions to address an issue/crisis -34 62
28
Has ethical business practices -29 61
32
Has transparent and open business practices -33 60
27
Works to protect and improve the environment -26 55
29
Creates programs that positively impact the community -23 49
26
SOURCE: 2012 – Edelman Trust Barometer; Responses 8-9 only on 9pt scale; gen. population McKinsey & Company | 12

14. Current trust driven by operational factors
Attributes that correlated with
current trust:
01 Delivers consistent financial returns
02 Innovator of new products
03 Highly regarded, top leadership
04 Ranks on a global list
05 Partners with third parties
SOURCE: 2012 – Edelman Trust Barometer; regression 8-9 only on 1-9 scale; gen. population McKinsey & Company | 13

15. Societal factors more important in driving future trust
Attributes associated with future trust:
01 Listen to customer need and feedback
02 High quality products or services
03 Treats employees well
04 Places customers ahead of profits
05 Takes actions to address issue or crisis
06 Has ethical business practices
07 Has transparent and open business
08 Communicates frequently and honestly
09 Works to protect/improve environment
10 Addresses society’s needs
11 Positively impacts the local community
SOURCE: 2012 – Edelman Trust Barometer; regression 8-9 only on 1-9 scale; gen. population McKinsey & Company | 14

16. Integrated, holistic, and strategic approach needed
Business
leadership
People Reputation Societal
leadership diamond leadership
Governance/
compliance
McKinsey & Company | 15

17. Key steps in strategic reputation management
Metrics
Led by CEO Roadmap of
actions,
communication,
Top team engagement
leadership
Key stakeholder
goals
Strategic plan
linkage
Integrated
corporate identity
McKinsey & Company | 16

18. Critical gaps in reputation management
Business Vision/values
People now trust
everyday
leadership Customer focus/integrated
experience
employees more
than the CEO
People Reputation Societal
leadership leadership
diamond
Communication/
engagement
Strategic community
support
Embed the values
and brand
Engagement on key
issues
Governance/ Values-driven culture
compliance Compliance program
Risk management
McKinsey & Company | 17

19. Time to really deliver an integrated customer-centric
experience journey
Evaluate
Bond
Consider Buy
Experience
McKinsey & Company | 18

20. Relentlessly embed your values and
brand promise in your people and
processes
Be strategic and catalytic in
community support
McKinsey & Company | 19

21. Step up and lead on key societal issues
Principles
Focus on issues most critical to your business
Seize the opportunity
Engage in dialogue with stakeholders
Show meaningful action led by your executive team
Measure progress and communicate
McKinsey & Company | 20

22. Champion social media risk management
▪ Implement real-time monitoring
and governance system
▪ Report summary results to
executive team and board
▪ Create ongoing and “special
situations” response teams
▪ Institute digital policies and
guidelines
▪ Build capabilities widely
McKinsey & Company | 21

23. Key takeaways
Strategic reputation management
an imperative
Trust Barometer highlights
opportunities
Linkage with strategic plan and
CEO leadership essential
Integrated, holistic approach
needed; address critical gaps
Lead on social media risk
management
McKinsey & Company | 22