Thanks to all of you who got in touch after I mentioned last week’s issues. I was on the road to recovery, but relapsed on Thursday night and am writing this tome with a swollen and battered face that even a mother couldn’t love. Next week, I promise this will arrive by 4pm - with lots of extra goodies for paying subscribers.

What keeps you awake at night? I recently asked a director of communications.

Sovereignty, came the reply. Blimey, I thought, here’s someone who’s honest about her global ambitions.

Alas, it seems I misunderstood. Sovereignty is currently one of the biggest issues facing US-owned businesses, particularly tech, as consumers seek to boycott American products.

Witness Tesla. Sales at Elon Musk’s electric car business have dropped 43% in Europe this year, in part due to consumers switching to cheaper alternatives, but also as a protest at the actions and comments from the world’s richest man.

Sparked initially by the threat of tariffs, ‘Boycott US goods’ groups are gaining momentum across Europe (ironically often on US-owned Facebook). Danish retailer Salling Group even makes it easier for consumers, upset by Trump’s threats to Greenland, by tagging European products.  

Indeed, a University of Cologne survey claims one third of German consumers now refuse to buy US products. In Austria, more than 70% claim a willingness to forgo American brands.

For some US-owned companies, this has prompted campaigns that reinforce the local nature of their business and their economic contributions.

Coca-Cola, which has operated in Germany for almost a century, launched a Made in Germany campaign in the summer, highlighting that 97% of the drinks it sells in the country are produced locally. It also emphasised that its operations contribute almost €9.1 billion contribution to Germany’s gross domestic product.

A similar strategy by McDonald’s claims 60% of the ingredients in its German offering are sourced in the country, including 100% of its beef, milk and eggs. 

As my sleepless contact revealed, for US-owned companies operating in the UK, the situation is further complicated. There is a need to sound the ‘Made in Britain’ klaxon while also stressing the European dynamic.

It is perhaps no surprise therefore to see Amazon recently highlight ‘seven ways’ in which it is helping the UK economy, from being a top ten tax payer to employing 75,000 people, while also unveiling new sovereign controls and governance structure for the AWS European Sovereign Cloud, that will be locally controlled in the European Union, led by EU citizens, and subject to local laws.

Indeed, it is in tech that the issue of sovereignty is most pressing. US tech companies control around 70% of Europe’s cloud market, a situation that looks increasingly tenuous following Trump’s re-election, and the widening rifts between the US and Europe over tariffs, trade and foreign policy.

As Francesca Bria, honorary professor at UCL’s Institute of Innovation and Public Purpose, puts it: ‘Europe cannot afford to remain a digital tenant in systems it doesn’t control.’

A new report by FGS Global, the snappily named The global technology race: Public attitudes on tech sovereignty, finds that 88% of the public in six key markets – Germany, France, Italy, Japan, US and UK – believe that tech sovereignty is somewhat or very important.

Moreover, two in five are willing to pay at least 50% more for technology manufactured and supplied by domestic companies. In the US, that figure rises to 49%, spurred in part by the America First rhetoric, while 17% are willing to pay double for local tech.

How individuals prioritise tech differs across countries. In the UK, there is significant support for the sovereignty of telecoms, perhaps related to the forced removal of Huawei equipment from core networks, while in Japan there is a focus on semi-conductors, coinciding with the government’s attempts to develop domestic capacity.

But there is also support from the public for their governments to intervene to make this happen, introducing policies that would enhance technological sovereignty, including localisation measures (70% support), supply chain resilience (73%) and efforts to stimulate private investment (71%).

What does this mean for my fatigued buddy? According to FGS: For global companies exposed to this debate, the trend implies having to navigate and balance rising expectations on localisation from policymakers and consumers across their global markets. Blimey, that’s enough to send her to sleep.

CORPORATE REPUTATION

Qantas links pay to reputation

Qantas is taking a new approach to executive remuneration – linking it to corporate reputation.

The Australian airline is asking shareholders to vote on a new performance target for chief executive Vanessa Hudson.

One fifth of Hudson’s long-term incentive plan will now be determined by Qantas’ reputation as determined by external data and insights provider RepTrak.

Qantas first introduced ‘reputation’ as a third performance measure for LTIPs last year, in response to a dramatic fall in public trust in the brand which caused the departure of Hudson’s predecessor, Alan Joyce.

(Fun fact: Joyced is now common Aussie parlance for being stranded at an airport.)

Initially, reputation carried equal weighting to the other performance measures – three-year total share returns relative to both Qantas’ airline peer group and Australia’s 100 largest stocks – but failed to define how reputation would be measured. This latest move appears to put some structure in place.

According to RepTrak, Qantas’ reputation stood at 67.4% as at 30 June 2025, up from 61.8% a year earlier. Both scores are defined by RepTrak as ‘average’, falling within the 60 to 69 bracket.

RepTrak calculates reputation scores based on how the ‘informed general public feel about a company based on ratings using a 1–7 scale from four statements relating to ‘trust’, ‘admiration and respect’, ‘good feeling’, and ‘overall reputation’.’ (Don’t get me started on ‘informed general public’…)

Hudson will benefit if Qantas’ reputation moves above 70%. The LTIP’s vesting scale is between 50% and 100% if the Flying Kangaroo’s reputation improves to between 70 and 79 (defined as ‘strong’ by RepTrak) and 100% if it exceeds 80% (excellent).

While there has been a surge in executive remuneration packages linked to ESG measures, this is possibly the first time I’ve seen reputation included in such a manner.

I recall that property group Quintain Estates & Development introduced a reputation-linked element worth 15% of executive bonuses about ten years ago, but the owner of Wembley Arena was acquired before the initiative had time to gain real traction (although arguably the acquisition also signalled that the focus on reputation had paid off).

In that example, Quintain conducted perception studies among its three primary stakeholder groups, as well as key journalists, which included a ‘killer’ question, answered by scoring between one and ten, and tracked on a half-yearly basis.

For investors, the question was: how effective is the management in the current environment? For employees: how likely are you to recommend Quintain as an employee to a friend? Targets were set for each stakeholder group.

But these questions were specific to Quintain’s requirements, whereas RepTrak’s scoring is not. Quite apart from the difficulties in using a third party to define reputation, there are so many factors at play that are outside the control of the CEO. I can see quibbles on the horizon.

What if baggage handlers go on strike just as RepTrak is conducting its ‘informed general public’ survey? Will respondents be able to disconnect this from Qantas, even if their bags stayed in Sydney while they visited London?

Will any allowance be made for the knock on effect of other airlines’ mishaps? Could a promotional marketing campaign, launched just ahead of the survey, sway views?

Admittedly, shifting reputation from 67.4% to above 70% does not appear too stretching, particularly as it improved almost six percentage points over the previous year. But won’t shareholders demand to know a bit more about the black box if a 100% payout is generated?

Incidentally, the jury appears out on whether introducing ESG-linked compensation measures into a CEO’s remuneration package boosts financial success. A recent report The moderating effect of CEO incentives and ideology in shaping the association between ESG performance and financial success suggested that while ESG-linked compensation measures do drive enhanced ESG performance, it may not be possible to attribute this to financial returns.

CORPORATE REPUTATION

Guinness: it’s good for you

The corporate affairs department at Diageo must have felt tempted to put in a call to their peers at Buck House this week. Netflix’s House of Guinness is akin to an Irish version of The Crown (if you consider the wealth and import of the family).

It opens with the (fictionalised) funeral procession of Sir Benjamin Guinness, grandson of brewer Arthur Guinness who invented the black stuff. But the interesting stuff really kicks in when his heir Edward Cecil took the reins.

He floated the company in 1886, reserving one third of the shares for himself. And, in one of the earliest examples of employee ownership, bequeathed shares from his portion to staff at St James’s Gate, as well as distributing cash bonuses.

I recently (skim) read The Search for God and Guinness (please don’t ask me why), where I learned that Edward Cecil’s mantra was ‘we must invest in those who serve us if we expect them to serve us well’. It’s the sort of quote that prompts a polemic in the pages of the Daily Telegraph.

He established the Guinness Trust to build better housing for ‘the labouring poor’, but also empowered Guinness’ chief medical officer John Lumsden to tackle its workers’ housing conditions.

Visiting the residences of 2,287 employees (out of a workforce of 3,000), Lumsden found that 35% were unfit for purpose. Why should that matter? Dublin at the time had the highest death rate of any city in Europe. In short, Guinness’s staff and customers were dying.

Apart from recommending building additional houses, Lumsden proposed six action points, including the appointment of an inspector of dwellings and cooking lessons for women.

But this was just the start: by 1928, Guinness employed two full-time doctors, dentists and nurses to tend employees and their families, widows and pensioners. It created a sanitorium for those recovering from tuberculosis. An onsite savings bank offered home loans and it paid for all employees between the ages of 14 and 30 to attend technical college.

When people deride corporate purpose, it is interesting to note that so many of our heritage brands built their businesses by looking after their employees. But this is not to be confused with philanthropy. It made business sense. It was about building a sustainable future for the business. And it worked.

ODDS & SODS

🤾🏼‍♂️ The pitch begins. An agency has launched a new product that the PR man feels would be just perfect for CorpComms Magazine. He can set up the interviews. The next day, there’s a further offer. The agency boss will write a piece for me, showcasing the new product. Am I interested?

Of course, I’m now forced to reply.

1) I’ve retired the brand CorpComms.

2) I never/rarely write about agencies or the products they launch.

And 3), I never accept unsolicited by-lined articles (which are, in my opinion, undisguised advertorials).

But apart from that, all good. Thanks for the offer.

📹 One in five US adults now regularly get their news from TikTok, up from just three per cent in 2020, according to a new report from Pew Research Center. The trend is pronounced among young adults: 43% of those aged under 30 now regularly get their news from the social platform, up from 9% five years ago. Pew claims that no other social media platform has ever experienced as rapid a growth in news consumption as TikTok.

🗑️ Yikes. IMD Business School apparently thinks that 90% of ESG reports are worthless fail to meet the demands of stakeholders. Apparently, they often have pretty pictures, engaging narratives but, er, lack rigorous data.

The most common pitfalls: incomplete emissions reporting, inconsistent or missing operational data on energy, water and waste, lack of third party verification and an overemphasis on storytelling. (Or, as I like to call it, the Pinocchio effect.)

🤢 Sadly, I am unable to share my online copy of the Daily Telegraph with everybody, but here is the opening paragraph of an interview with James Henderson, former CEO of Bell Pottinger. Mills & Boon eat your heart out…

James Henderson is sitting in Dubai’s most sought-after beach club. His antique Cartier watch glistens in the sunshine, and his blue Gucci loafers are speckled with just the right amount of sand.

And here is just one of more than 400 readers’ comments:

More info required please DT as to the precise amount deemed to be 'just right'. Need to know for my next trip to Great Yarmouth - one so hates to be thought declassé.

You’re welcome! 🤣🤣🤣