Heidrick & Struggles expert Hannah Peech on why reputation is a key board-level asset

Public perception has never been more important for corporations. Hannah Peech, principal at Heidrick & Struggles, explains how the corporate affairs director role is evolving as reputation becomes a measurable driver of business value.

Why has reputation suddenly become a boardroom priority?

The numbers make the case. Research shows reputation accounts for roughly a third of the market value of the UK’s largest listed companies.

The business environment has also become more visible – and open to critique. Regulators are more active, media cycles are faster, social media is a huge channel of influence vs traditional media and investors are scrutinising governance and culture more closely.

There is also cost to not strengthen reputation in ‘peace time’. Boards have realised that perception carries weight, in M&A there is a ‘reputational value’ applied to deal making – reputation is no longer a fluffy concept.

Finally, we are experiencing extreme geopolitical turbulence. Businesses with strong reputations are more trusted in times of chaos.

As a result of this boards are having reputation metrics included in their ‘enterprise risk management framework’ – a series of risk factors for regular review, which holds the board accountable. 

How should organisations think about reputation as a commercial asset?

Businesses with strong reputations are more financially successful.

Start with pricing power. Consumers consistently pay a premium for brands they trust. That can have a direct effect on top line growth. Then look at talent, the best candidates are increasingly choosing employers based on cultural credibility and purpose which is being taken into consideration alongside compensation. Reputation is a recruiting tool whether organisations treat it as one or not.

From an investor standpoint, governance track record and leadership integrity are now central to due diligence, shaping both access to capital and its cost. Regulators tell a similar story as organisations with a proven record of accountability tend to navigate complex environments more smoothly.

Perhaps the most underappreciated dimension is resilience. When things go wrong, and at some point, they do, companies with strong reputational foundations recover faster. Existing trust acts as a buffer. Reputation is a multiplier of growth, stability and long-term value.

How has the corporate affairs director role actually changed in practice?

Corporate affairs has emerged from the integration of communication, government affairs and in some instances (in B2B organisations) marketing functions.

Today’s leaders are expected to read the external environment, everything from geopolitical shifts to regulatory change to societal pressure and then translate that into strategic intelligence the C-suite can act on.

The function now sits at the intersection of communications, governance, public policy and enterprise risk. They are the ‘nerve centre’ for gathering and interpreting the external world.

There has also been a significant shift in commercial expectation. Corporate affairs directors must frame reputational issues in financial and strategic terms, linking them to performance and risk exposure. The best leaders have moved from reactive to anticipatory. They are identifying risks early enough to manage and act on.

What capabilities are boards now demanding from senior corporate affairs hires?

The baseline expectation has shifted considerably. Boards want leaders who operate as strategic peers rather than functional specialists who report upward. That requires a different range of capabilities than the role has traditionally demanded.

Commercial and financial literacy is essential. Leaders must articulate how reputational dynamics connect to business objectives. Geopolitical and policy fluency matters as well. Boards navigating trade fragmentation, regulatory changes and geopolitical volatility need someone in the room who understands those dynamics at a granular level.

Cross-functional credibility is important. The most effective corporate affairs leaders work alongside finance, legal, risk and marketing to contribute to strategic decisions. In high-stakes situations, board-level judgement becomes critical so top corporate affairs leaders must have the clarity to advise when reputation, regulation and strategy are all in play simultaneously.

What is the cost of getting this wrong and under-investing in corporate affairs at a senior level?

Significant, and it compounds. Reputational damage is far more expensive to repair than to prevent. Market value erodes, operations can be disrupted and trust, once lost, takes years to rebuild.

Without a strong corporate affairs voice at the top table, organisations are more exposed to being blindsided. Political, regulatory and media developments that could have been anticipated can become crises that have to be managed.

There is also a signalling effect that is easy to overlook. Under-resourcing corporate affairs signals to investors, regulators and employees how seriously the organisation takes governance and accountability. That is a reputational risk in and of itself. When a crisis hits, companies without strong foundations take longer to recover. This can lead to losing customers, talent and market confidence. So, the harm goes beyond reputational, becoming commercial as well.