EDITORIAL: Trust survey puts out a clear signal

The global business elite gathering in the Swiss mountains this week for the World Economic Forum would not be devoting three days to discussing the issue of stakeholder trust unless it was of pressing importance to the world of business.

They have good reason to be concerned. As the latest Edelman trust survey reveals, the last year has seen a decline in the amount of trust we are prepared to place in business. In the most general terms, barely one third of opinion leaders believe what global corporations have to say. In the UK, the three most trusted brands are all non-profit organisations. And while Amnesty International, the World Wildlife Fund and Oxfam all have in their favour a lack of commercial motive, there are lessons in the way they operate for private sector enterprises hoping to garner trust among their key audiences.

Clearly, it is possible to combine profit-making endeavour with trust.

The ratings for the most-trusted corporate giants - in this case, HSBC and Ford - are only marginally lower than those for NGOs at the top of the trust scale.

But the broad conclusion from this research is a lesson many in the PR industry learnt long ago and are forever trying to persuade management of - that trust is built on the back of open and credible relationships and that the management of such relationships is therefore absolutely vital. But above all, trust is determined by organisational behaviour. The way corporations behave - rather than they way they describe their behaviour - is ultimately what determines the level of trust people are willing to place in them.

It is in this context that this week's report into the role of non-executive directors by Derek Higgs should be welcomed. Higgs' code on corporate governance insists that nobody should chair more than one FTSE100 company, that non-execs should be genuinely independent and that the cosy City tradition of CEOs becoming chairmen before drafting in their friends to fill the non-exec seats should come to an end.

There is a well-aired argument that Higgs did not go far enough in stamping out cronyism and ineffectiveness on plc boards. But the overarching aim of those who act on the spirit as well as the letter of Higgs is the praiseworthy goal of lessening reputational risk - be it the prevention of share price damage or the sustaining of a strong sales record.

Acting in good faith on such recommendations as the Higgs report may be easier said than done. But if business ignores this sort of attempt to circumvent reputation crises, it cannot complain that it is not trusted as much as it once was.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.