I believe that public relations is the business of reputation. In recent years reputation has taken on a whole new importance in the business world. But what creates a reputation? People think that what PR people do is create "spin," and that what PR people do is create “spin,” and that spin can create a reputation.

But I’ve never met a serious journalist who fell prey to spin. The key drivers of reputation in the business world are not fabricated stories, but rather trust, which is founded on ethics and responsibility. Trust, ethics and responsibility—what people in business once thought of as soft management skills…or fluff! This is the foundation of a strong reputation.

If you go by just the headlines, it’s a bleak landscape. And photos leave a strong imprint on the general public. Public opinion polls show that positive perception of key industries has dropped sharply over the past few years. Merck, for instance, is struggling with the reaction to its Vioxx product withdrawal from the market.

Merck has been for many years one of the most respected companies in the world, yet the company and its management are being accused of wrongdoing, of intentionally misleading the public— with scant opportunity to present their point of view.

It is a strong reminder that product crises, failures of many kinds and unacceptable behavior by individual employees somewhere in the world, could happen in any company, at any point in time. And today, neither the media, governments, your investors, nor the public is going to be very forgiving.

Something fundamental has changed. For top management, the portfolio of issues that have to be dealt with and responded to is not the same as it was even a short 5 years ago.

I would argue that the corporate managers who will be promoted, and the business leaders who will be respected, are those who can deal with this complex new world of trust, ethics and responsibility in a proactive and value-based way.

The scope of business leadership responsibilities has changed as well. Those who are entering business today have a new kind of moral compass, one that includes both good business ethics and a sense of real corporate social responsibility. And it’s those two factors that will build a new age of trust between business and its stakeholders.Questions in a recent survey of IMD graduate students, now rated among the best business schools, were focused on a few key issues: What do you hope to achieve? What are the tough challenges you are ready to tackle? Let’s take a look at what they had to say.

What do you want to be known for?

•Provide leadership while gaining credibility at the same time.

•To be recognized for being an empathetic leader and putting people first.

•Reach the top of the corporate ladder with a track record of integrity.

•Making decisions or influencing policies that directly affect the lives of people in developing countries, either by creating jobs, or providing healthcare, education, training.

In short, more than half mentioned credibility, integrity, empathy, balance, helping the less advantaged. This contrasts starkly with what the public believes the broad values of business leaders are: ambition, greed, financial benefits. (see chart 1) How do you feel about the pressures to turn in stellar financial results quarter after quarter?

It was impressive to see that that many responded by saying that their greatest challenge would be to manage the tyranny of numbers. We should not be naïve. We know that without a profitable business one cannot survive. Recognition of this tension is critical for achieving both goals: profit and an ethicsbased vision. Only 57% disagreed that the mandate of companies is to serve shareholders alone, or primarily. They stood apart from the public perception that business for the most part is only financially driven. (see chart 2) Since the pharmaceutical industry was criticized in the early ’90s regarding access to AIDS medicine in South Africa, there has been considerable debate about business’ role and obligation to help those in need. How do we feel about the new boundaries of business leadership? Do we believe that these boundaries extend beyond serving shareholders to addressing and meeting societal expectations or to helping the underprivileged in the developing world? 67% responded that business has some obligation to provide for poor people’s needs. (see chart 3) The majority felt that it is incumbent upon multinational corporations to help