The current crisis has highlighted the need to reflect on the way capitalism works and to rethink the bases on which companies are valued and managed. The disconnection between wealth creation (quarterly sales and similar ratios) and the creation of value (sustainable in the long term) has led to a perverse result.
If the Upper Management exclusively judges, and is judged, on these standards, we will not be able to overcome the current context. We need new tools for business management, which need to be based on a reputation-related approach, on the ability to be credible and build trust among stakeholders. We would like to propose three tools to promote change and foster a new model of business management: Reputation, Sustainability and Transparency. Reputation implies generating value in the long term for the business based on a business model established according to the Five P&L Account. Sustainability consists on establishing a sustainable and stable relation with the environment, a business model which lets all players gain by sharing values and revenues. Transparency is the best possible accountability tool; it involves being open for scrutiny and the participation of critical stakeholders in the management of the business.
The report “Technocracy or Politics? Reputation, Transparency and Leadership” analyzes the way in which Reputation has become a priority element in the Upper Management of a business organization or institution, which requires financial and human resources, based on the challenge the corporation will face.
Jorge Cachinero, Corporate Director of Innovation at LLORENTE & CUENCA, Professor at IE Business School and Member of the Scientific Council of Elcano Royal Institute
Juan Luis Manfredi, Journalism Professor at the University of Castilla-La Mancha