CEOs are one of the most ‘underrated’ marketing tools, study finds

New research shows a strong correlation between the personal reputation of CEOs and that of their brands, particularly in founder-led businesses.

ElonMuskThe reputation of a CEO and that of the brand they lead are closely tied together, with outspoken CEOs having a particularly positive or negative impact on brand reputation, according to research shared with Marketing Week by Brand Finance.

This makes a business’s top executive “one of the most underrated marketing tools” available to brands and their CMOs, says the brand valuation consultancy’s general manager Annie Brown.

However, they can also be a reputational liability. Therefore, it’s very important that boards select leaders “on the basis of compatibility with company and brand values”, she adds.

Brand Finance tracked the personal reputation of the world’s top CEOs with a survey of 1000 analysts and journalists, and cross referenced it with its Global Brand Equity Monitor, an annual research programme tracking over 4,000 brands.

As illustrated in the below graph, brand portfolio reputation rises with CEO reputation, indicating the two are correlated.

Source: Brand Finance

The relationship goes both ways, Brown notes. “An organisation with a reputable brand or brands will have a halo effect on its CEO.”

Brown takes the example of Elon Musk, the famously outspoken founder and CEO of electric car company Tesla. Year-on-year tracking shows that as his own reputation as CEO saw an uptick, so too did the brand reputation of Tesla in the USA among consumers.

Between 2021 and 2022, Musk’s reputation score out of ten grew from 7.6 to 8. Meanwhile, Tesla’s reputation grew from 7.2 to 8.6.

The opposite effect can also take place, however.

“When reputational crisis hits a company, this can seriously damage personal reputation of a CEO,” Brown explains.

“Simultaneously, personal reputational issues can have a negative impact on the reputation of a company’s brands.”

The last year has since a number of CEO controversies make national news, most notably P&O Ferries’ CEO Peter Hebblethwaite’s decision to unceremoniously sack around 800 staff without warning in April, and accusations levelled at BrewDog CEO James Watt last June that he fostered a “culture of fear” for employees internally and faked publicity stunts.

BrewDog’s reputation score plummeted from 19.1 to just 1.6 in the aftermath of the accusations, according to YouGov’s brand health tracker BrandIndex. As of 13 May, that score has fallen further to -0.2, as Watt continues to find himself subjected to criticism in the national press.

Meanwhile, P&O Ferries’ reputation metric fell from 16.7 to -9.5 following the mass firing. Hebblethwaite later admitted to a parliamentary select committee that he had broken the law with the decision, and was branded “the most hated man in Britain” by Scottish Labour MSP Monica Lennon. As of 13 May, P&O’s score has declined as far as -42.4,

P&O is the rare reputation crisis that really does matter

Although all CEOs can impact the reputation of their brands, founder-run organisations like BrewDog and Tesla see a particularly strong connection, Brown says.

Outliers to the rule

There are some “outliers”, however. Brown says this can be explained by CEOs who are relatively new to their role.

“The brand portfolios with the lowest reputation have new CEOs,” she explains.

“CEOs who have been in position for more than 10 years tend to achieve average or higher reputation for their brands.”

According to Brown, this suggests stability in leadership is “good for brands”, and that brands with reputational issues may hire a new CEO to try to reshape the company and reverse its reputational damages.

Source: Brand Finance

Businesses that take a house of brands approach to branding may also see less of a strong connection between their CEO’s reputation and that of their brands, because the link between the two is “weaker”. For example, people may know Alan Jope as the CEO of Unilever, but not necessarily make the connection to Magnum, or any of the FMCG giant’s other brands.

“Therefore, the impact of CEO reputation on brand perception and vice-versa is less acute,” Brown says. “That said, there are some house of brand organisations which have one of the consumer brands also as the company name – Coca-Cola, for example. In these cases, the link is more tangible.”

Overall, Brown says the research provides further evidence that CEOs are “increasingly” seen as the face of the organisations they represent.

“It is crucial for CEOs to uphold the values of their brands. The CEO is ultimately accountable for everything in an organisation,” she says.

“Particularly in founder-run, mono-branded organisations, CEOs are perhaps one of the most underrated marketing tools that a CMO has at their disposal.”