Company leaders are becoming more credible and trustworthy says Edelmans new survey
The new annual survey of trust in institutions developed by PR firm Edelman delivers a mixed message. Globally, trust in all institutions government, business, NGOs and media is up. In some countries, including some of the larger developing economies, trust levels are remarkably high. In other countries, the numbers are abysmally low.
The good news for the business community is that, after the loss of trust seen in the wake of the 2008 financial collapse, trust appears to have stabilised. It is again on the rise, with 56% of survey respondents expressing trust in business.
This number rises to an astonishing 81% in Brazil. Russia, on the other hand, wallows at 41%.
But Russia is in good company. The US and UK clock in at 46% and 44% respectively, and in the US, this figure is down eight points from 2010. One of the starkest messages in the survey is the decline in trust across all four types of institutions in the US the only country to suffer this decline.
Aron Cramer, chief executive of US-based Business for Social Responsibility, participated in the launch of the Trust Barometer at the World Economic Forum in Davos. He argues that the results of the new survey have to be seen in the context of weak economic and employment conditions, "as well as a sense that the United States relative position in the world is eroding."
Cramer says people see the goals of large traditional institutions as disconnected from broader societal goals. "The average person believes business is not focusing on the things that matter most to me," he says.
Maintaining trust in this context is extremely challenging, Cramer argues. "In our era of radical transparency, the public has lost a degree of confidence in both the objectives and the methods institutions use to accomplish them."
Another notable message in the new survey is the trend away from trust in peers back towards "credentialed" authorities.
Experts and academics lead this category, but chief executives have enjoyed a rise in their credibility as well now seen as one of the most trustworthy sources of expertise, having languished second from the bottom in 2009.
The big questions
Cramer argues that the chief executives who enjoy greatest trust have embraced the big social questions central to economic success and the health of society. He says: "Jeff Immelt [for example] has been active on climate, health and transparency and has worked to steer GE in that direction."
The new barometer reflects the belief that trust is a vital element of social capital. When a company enjoys good levels of trust, its reputation can be protected against the impact of bad news. When a company is trusted, people are far likelier to believe positive information about the company, and far less likely to believe negative information about it. The opposite is true in the case of a distrusted company.
While it may come as no surprise that trust is a good thing for business, the survey responses show that this benefit can be quantified.
So what can companies do to improve their odds? Laurence Evans of StrategyOne, Edelmans survey research arm, says: "Businesses should communicate more frequently and transparently on company actions to safeguard customers, employees, supply chains and communities, and not wait to justify or explain their actions [only] when there is a crisis."
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