Trust in US business increases

NEW YORK: Trust in business increased slightly this year, in part due to the efforts industry made to engage stakeholders, make its CEOs more transparent, and help solve the pressing economic issues, according to a study by Edelman.

NEW YORK: Trust in business increased slightly this year, in part due to the efforts industry made to engage stakeholders, make its CEOs more transparent, and help solve the pressing economic issues, according to a study by Edelman.

The 2010 Edelman Trust Barometer reported that 54% of people in the US trusted business to do what is right. The firm surveyed informed adults aged 25 to 64 years old. Trust also rose in Germany, France, Italy, and the United Kingdom but it declined in India, Brazil, Japan, and Russia. China's trust remained flat.

Edelman said the 2009 barometer found that only 36% of people in the US trusted business do what is right. It was the lowest percentage of trust in US business that Edelman has reported since the creation of the barometer in 2001.

“US business is more trusted than a year ago,” said Matt Harrington, president and CEO of Edelman in the US. “We saw that increase in 19 of the 20 companies we surveyed.”

Trust in government in the US also increased by 16% last year, while trust increased moderately in France, Germany, China, and India. It declined in the UK and and Russia.

“In previous years, we've seen loss in one means recovery in another,” said Harrington. “But the fact that business and government are moving in a parallel path to recovering trust is interesting and likely indicative that those we surveyed look for government and business to work together.”

Fifty-nine percent of people surveyed in the US expect business and financial companies to return to “business as usual” when the recession ends. Trust in banks dropped 39% in the US, the largest overall decrease compared to trust in banks in Germany, France, and the UK. (All three countries reported declines for trust in banks.)

“While we have seen a recovery in trust in business, it's very fragile,” noted Harrington. “And, if banks are going to try to rebuild trust and re-earn trust, it's going to require showing that they aren't going to return to business as usual.”

The report cited industry's efforts to fire non-performing managers, repay bailout money, and reduce executive pay as ways that companies were able to restore trust in 2009.

It also reported that the credibility of CEOs increased by 9%, with 40% of people surveyed in the US saying that CEOs are a credible source of information for a company. Trust in CEOs rose in Russia, France, the UK, and China by at least 7%.

“Yes, financial returns are a cost to doing business or presumption of a license to operate but more important is the degree in which management is transparent and open,” said Harrington.

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