Executives in poll see corporate reforms as fleeting

By Robert Gavin, Globe Staff, 10/15/2003

Changes enacted following recent corporate scandals are unlikely to have any lasting effect on the way companies do business, a majority of Massachusetts executives said in survey to be released today.

This skepticism flies in the face of the more upbeat views of those who have put in place new laws, rules, and policies in the hope of preventing the accounting, stock manipulation, and executive pay scandals that have rocked corporate America since the collapse of Enron Corp. less than two years ago.

The executives were equally skeptical about the prospects for the Massachusetts economy: More than three-fourths rated business conditions in the state as fair or poor, and only 18 percent said they expected their companies to grow a lot over the next year.

These are among the findings of a new poll, the first Massachusetts Corporate Reputation Survey, that aims to gauge how the state's leading companies and nonprofits are viewed. The survey, conducted last month for Morrissey & Co., the Boston public relations firm, asked 201 Bay State executives to rate 144 Massachusetts organizations based on their overall reputation, as well their reputation for products and services, workplace environment, social responsibility, ethics, and financial stability.

Morrissey officials said they plan to conduct the survey annually.

Nearly a quarter of executives cited honesty, integrity, and ethics as the most important factors in improving reputations. Improving employee benefits and customer service were each cited by 11 percent as the key reputation-building factor.

Despite the view that ethics play a key role in corporate reputations, 53 percent of the executives still said that changes brought about by the recent wave of corporate reforms are likely to be "only temporary." Only 35 percent thought that corporate governance would be permanently improved, with the balance unsure of the long-term impact.

"It's a view that some people are going to find ways to skirt the rules again," said the pollster, John Gorman, president of Opinion Dynamics Corp. in Cambridge. "And I'd have to give the 53 percent pretty high marks for realism."

W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College in Waltham, said this realism reflects doubts that ethics can be legislated. Just as passing laws against segregation didn't immediately eradicate prejudice and racism, so they won't quickly change corporate behavior, he said.

"You have to develop an ethical culture, and that requires ethical leadership, and you can't legislate that," Hoffman said.

The poll also asked respondents to rank Massachusetts organizations according to their reputation. The top 10 were dominated by the state's renowned educational and healthcare institutions, led by Harvard University, and followed by Boston College. Only two for-profit companies cracked the top 10: Fidelity Investments at number three, and Reebok International Ltd. at number nine.

At the bottom of the list were smaller, and relatively new technology and biotechnology firms. Ed Cafasso, senior vice president at Morrissey, said these companies were not ranked low because they were viewed badly, but rather because they were not as well known as longer-established Massachusetts institutions.

What the top 10 have in common, said Cafasso, is a long history of establishing their reputation by reaching out through many different avenues: through publicity, marketing, customer service, community involvement, and networking in the business community. These emerging companies, while making headlines, have yet to establish as broad a reach.

"Right now, they're focused on research, development, and delivery," Cafasso said. "But there is more to reputation than just having your name in the media. There are tons of companies that are in the news that don't have wide and deep recognition."

The executives' outlook on the economy reflected what other surveys have shown: a belief that the economy is not worsening, but the sense that only slow growth remains immediately ahead. Forty-four percent said they expected their business to grow "a little" in the coming year, and 28 percent said they expected it to stay the same.

Robert Gavin can be reached at rgavin@globe.com.