Trust in business is at an all-time high. What does that mean for corporations?
7 min read
20 Oct 2021
7 min read
20 Oct 2021
A recent survey shows that people have more faith in business than in any other institution. While certainly positive, this trust also comes with significant responsibility and high expectations.
The devastating societal and economic consequences of COVID-19 at first led people around the world to put their trust in politicians to protect them. But as the pandemic drags on, this trust has dissolved into disillusionment, and business is now considered the institution best equipped to tackle the major issues of the day, such as climate change and inequality in addition to COVID.
Edelman’s 2021 Trust Barometer Spring Update: A World in Trauma found that ‘my employer’ (77%) and business (62%) were the most trusted institutions – far ahead of government (56%), non-governmental organisations (58%), and the media (51%). The survey was conducted among 33,000 respondents in 28 markets in 18 countries.
This is a significant change from the 2020 Spring Update, which saw trust in government at an all-time high of 65% and at the top of the most trusted institution list for the first time, as people relied on elected officials to protect them in a way not seen since World War II.
Trust in government displaced by trust in business
However, more than a year since the start of the coronavirus outbreak, politicians have once again been displaced by business – with nearly eight in 10 people expecting their employers to act on societal issues such as climate change, racism and social inequalities, and vaccine hesitancy.
One key reason for this change is that while governments were initially seen as best placed to protect their communities through public health measures or economic support, there has been widespread frustration with the global response amid rising deaths, ongoing restrictions, and often sluggish vaccine rollouts.
By comparison, many companies were seen as having been more agile in dealing with the crisis. Scientists developed vaccines at record speed, companies of all kinds used 3D printers to manufacture personal protective equipment, telecommunication giants donated phones for isolating patients, and grocery stores expanded delivery options to help the vulnerable.
Thanks to these kinds of initiatives, many now see business as more capable of coping with issues typically tackled by politicians. It’s important to note, however, that most people are more familiar with the actions of their employer than the government, and the pandemic has coincided with an explosion of misinformation and an era of highly polarised politics.
Business often seen as outperforming government
In Edelman’s Spring Update, business was seen outperforming government on driving economic growth and job creation, responding to the health and public safety aspects of Covid-19, guarding information quality, and addressing systemic inequalities.
Government was only seen as having done better on issues such as ensuring that education prepares people for jobs of the future and addressing climate change. The two were deemed even on improving healthcare.
In many ways, companies are perhaps best placed to deal with issues such as systemic racism and the gender pay gap – after all, the workplace is where many people generally experience inequalities in terms of opportunity and pay.
Meanwhile, consumer purchasing power and investor pressure has led to corporations such as airlines, car makers and producers of consumer goods producers becoming more sustainable and reducing their carbon footprint to tackle climate change – often faster than through top-down legislation from government, for example.
‘Trust is a privilege extended to business’
But this trust is not to be taken for granted, warns Nien-hê Hsieh, Kim B. Clark Professor of business administration and Joseph L Rice, III faculty fellow in the General Management unit at Harvard Business School. “I would say that trust is something that should be carefully stewarded, respected and built upon,” says Hsieh. “It’s kind of a privilege that’s been extended to business, to have that trust.”
The last decade has seen an increasing emphasis on corporate responsibility – with greater expectations from consumers, investors, and societies alike. But Hsieh says it is necessary to distinguish between different expectations and motivations.
For example, while a manufacturer introducing better health and safety measures in the workplace, or a bank widening the access of traditionally marginalised groups to credit, can be seen as leading on social change, these may simply be positive actions companies should take because they’re consistent with their general responsibility as a corporation.
And while it is impossible to separate social change from business activity, should public debate and action on issues such as race, gender and same-sex marriage really be led by private corporations in a democracy? Given the need for accountability, such debates may best be left to the domain of elected representatives.
Social change and corporate actions inextricably linked
However, the perception that social change and corporate actions are deemed inextricably linked is echoed in Edelman’s report, with most of the respondents in each of the countries surveyed saying their country cannot overcome societal challenges without the active involvement of business.
Dave Samson, Edelman’s global vice chairman, corporate affairs, says: “As much as people are looking for business to lead, business can’t go at it alone. To help solve the world’s biggest problems facing our world today, chief executives and the companies they lead, must partner with governments, NGOs, and others to ignite positive change and to scale a collective response across sectors, institutions and geographies.”
He adds that business leaders must act on a broader set of concerns for the good of their companies and society. “They must put the human experience at the centre of responding to the needs of their employees, customers, investors and communities. Doing so will not only further their business interests; it will further the betterment of society,” he adds.
But commitments and public proclamations are not enough, Samson notes. “Businesses are operating in an era of accountability in which their actions matter far more than their words. To earn the public’s lasting trust, companies must be accountable and transparently report on the progress they are making to solve these issues they have pledged to overcome.”
Hsieh stresses that trust is something to be nurtured and respected. “It provides a great opportunity for business to have that trust,” he says. “But at the same it’s something that can be lost or undermined quite quickly.”