Public Trust in Business Rises for Third Consecutive Year
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As the global economy is improving, so too is public trust in business. For the third year in a row, trust in the private sector rose globally, up five points from last year, according to the 2013 Edelman Trust Barometer. After an overall drop in public trust following the economic downturn (which also impacted trust in government and the media), trust in business has steadily rebounded, with all business sectors in the United States seeing improvement, albeit at different rates for different industries.
Of the 11 industries covered in the survey, the technology, automotive and consumer/beverage sectors took the top spots for trustworthiness, in part because these industries have been productive and profitable in recent years, driving up positive public perception and consequently, trust. Banking and financial services, which suffered reputation damage after the economic crisis, ranked at bottom of Edelman’s list. Yet, since the economic downturn, banking and financial services have seen some of the greatest growth in trust of any industry. Trust in banks has doubled to 50% since the lowest point in 2011.
Business size also has an impact on trust. In the United States, 86% of respondents to Edelman’s survey indicated trust in small businesses, while 55% noted trust in larger companies. (Interestingly, the reverse is true in most developing nations, where big businesses hold more public trust than smaller companies.) When it comes to leadership, the U.S. public has the highest confidence in small business and the military, according to a 2013 Harris Interactive poll on reputation. Half of respondents indicated a “great deal of confidence” in small business leaders, while 55% had the same level of confidence in military leaders. Major corporations ranked third on the Harris Interactive list with just 15% of the public reporting confidence, but ahead of law firms, the press, Wall Street and Congress.
Company CEOs have significantly lower levels of trust than in the organizations they lead; trust in business is 35% higher than trust in business leaders. This does not suggest that business leaders are untrustworthy; rather, it shows a shift in how the public determines credibility and trust in business.
Lessons for Business Leaders
Americans are increasingly taking proactive steps to investigate how businesses operate. According to the Harris Interactive poll, 56% of Americans take the initiative to learn more about the companies they encounter or with which they do business. The poll found that 67% of people spoke to someone else about a company’s conduct, with 52% deciding not to do business with the company because of what they learned.
When looking for information about a business, the public tends to trust independent groups like technical experts, academics and peers more so than business leaders. According to the Edelman survey, just 20% of the public believes business leaders make ethical and moral decisions, and a mere 18% expect business leaders to be truthful. While CEOs did see a 5-point growth in public trust since last year, trust overall remains low at 43%.
Why does so little of the public trust CEOs? It is largely due to the changing way in which the public assesses trustworthiness, according to the survey. Whereas trust was formerly linked primarily to commercial success, trust today is drawn more from from how a company achieves its goals. The Edelman survey shows that the public trusts businesses that focus on employee and customer satisfaction and follow transparent, ethical business practices.
“When I look at the data, what strikes me is that people have the greatest level of trust in people and organizations to which they have access and over which they have at least some level of influence,” Gadi Ben-Yehuda of the IBM Center for the Business of Government writes in Government Executive. “In short, the more people can see what an organization is doing, and how it is doing it, and the more they feel that they have a voice in the organization’s goals and activity, the more trust they have in that organization.”
CEOs are reacting. Some two-thirds of CEOs from the top 50 companies in the world are using social networks to engage the public online, and U.S. CEOs are the most likely of all nationalities to use them, according to a Weber Shandwick survey.
“Despite the large gains in CEO sociability on company web sites and in video usage since 2010, social networks are still underutilized by CEOs, indicating that they are either worried about taking a risk or are unsure about the return-on-investment by going online,” says Chris Perry, president of Weber Shandwick’s Digital practice.
While social media gives CEOs and others a way to improve the perception of accessibility—and consequently, trust—some businesses may find that the CEO is not the most effective face of the company and would be better off finding ways to generate positive expert and public discussion to raise their trust levels.