Trust and Business Leadership
Can much of the current political unrest be explained by the decline in trust of our leading institutions by the majority of citizens? A brief read of Edelman’s Trust Barometer might cause one to agree.
In answer to the question: ‘How much do you trust?’ in a survey of 33,000 respondents aged 18 and over in 25 markets 53% said they trusted NGOs, 52% trusted business, 43% trusted the media, and 41% trusted government. The level of distrust varies across countries but in almost every country there has been a steady decline in trust over the past the past few years.
Table: Distrust figures for selected countries
Reading behind these global figures are some interesting details.
In a crisis government official are only rated as very or extremely credible by 29% of the population, CEOs fared a little better at 37%. Most people are skeptical about what they are told by leader in a crisis.
Edelman sets out the path of a downward spiral as concerns turn into fears. Edelman focuses on five major concerns: corruption, globalization, eroding social values, immigration, and the pace of innovation. As concerns among the population grow to fears their belief in the system is eroded. Trust declines. The risk of population action rises.
Figure: Edelman’s Downward Spiral
Implications for Business
If CEOs, NGOs. And government are not credible – then who are credible?
A person like me 60%
Technical expert 60%
Academic expert 60%.
Even these figures are not encouraging, 2 out of 5 people do NOT find these people credible!
‘Business plays a role in stoking societal fears’ says Edelman as people worry about losing their jobs because of lack of training ,or to foreign competitors, or to immigrants willing to work for lower wages, or because jobs are moved to offshore. Little surprise then that protectionism is on the rise.
The advice for business is clearly set out. Citizens expect that businesses should stop:
a. Paying bribes
b. Paying senior executives hundreds of times more than workers
c. Moving profits offshore
d. Overcharge for products that are necessities of life
e. Reducing costs by lowering quality …
a. Adopt ethical business practices
b. Treat employees well
c. Pay fair share of taxes
d. Listen to customers
e. Offer high quality products / services.
There is a wealth of detail behind these statistics and while details vary from country to country what seems to be clear from Edelman’s report (which has been conducted annually since 2001) is that across the world people are crying out for leadership. And business leaders have the opportunity to provide responsible leadership. But they need to put the interests of consumers and their employees above their own personal desires.
This message is amplified by Simon Sinek in his talk “Why leaders eat last”.