In the never-ending battle between the half-full-glass forces of hope and the half-empty-glass legions of doom, one of the hottest debates these days is over the status (or existence) of an economic recovery. While most attention is focused on a recovery measured in dollars and cents, a recently released survey points to signs of a recovery that may be even more valuable to business – recovery of trust.
The 2010 Edelman Trust Barometer found that trust of U.S. business to do what is right has increased over last year from 36 percent to 54 percent among those surveyed in 20 countries. Shocking? Perhaps, but maybe it’s another indication that CEOs are getting it that the public demands more accountable behavior and will respond favorably to it. Could it be that performing under pressure during a recession paid off?
When the Boston College Center surveyed U.S. senior executives for its 2009 State of Corporate Citizenship, some 54 percent said they believe corporate citizenship is even more important in a recession. Among those same leaders, most said their companies had increased internal and external communication about corporate citizenship in 2009. It looks like it was worth the effort.
The Edelman survey also found that trust in the United States government is up from 30 percent to 46 percent of those polled, one of the largest increases in trust in government among the countries surveyed. According to the folks at Edelman, this doesn’t match past trends. In the past, if trust in business fell then trust in government rose, and vice versa. But now it looks like both sectors are in it together when it comes to meeting public expectations. This would seem to match recognition among most business leaders in the State of Corporate Citizenship, who believe business should be more involved in addressing major public policy issues including health care, product safety, public education and climate change. It appears that passing the buck is passé.
In terms of what trust delivers, the Edelman survey found trust and transparency are as important to corporate reputation as the quality of products and services, particularly in the United States and much of Western Europe, where those two attributes rank higher than product quality or financial returns, which sits at or near the bottom of 10 criteria in all regions.
Senior executives in the United States understand that trust and transparency are tied to reputation and that good corporate citizenship helps build trust and demonstrate transparency. Those surveyed in the State of Corporate Citizenship clearly make the connection, with 70 percent identifying reputation as the No. 1 driver of corporate citizenship. The connection between perceived responsible behavior and trust likely explains why trust is up for every industry save one – banking. Banks went from being one of the most-trusted sectors before the recession to near the bottom of the list, declining from 71 percent in 2008 to 33 percent.
Another aspect of public trust that is plummeting is trust of information about companies. It seems that a flooded market of information may have devalued information across the board. Trust is down in information about business from conventional news outlets of all types including radio, TV and newspapers. And less than half of those surveyed think the most-trusted sources of information on business – stock or industry analysts and business magazines -- are credible. But people aren’t putting a lot of stock in information from some of the newest vehicles for getting the word out on business. Social networking sites lay at the bottom of the trust barometer, just above advertising, viewed as credible by less than 20 percent of those surveyed.
The public’s uncertainty about what it really knows about business should temper the good news on trust. While overall the news for business out of the Edelman survey is encouraging there is plenty of reason for caution. Almost two-thirds (59 percent) of U.S. respondents to the survey express concern that business and financial institutions will return to “business as usual” after the recession is over.
It appears that business will have to build or maintain trust from the public on an ongoing basis the old-fashioned way – by earning it.