The Western World: Do We Have Trust Issues?

One thing has become clear over the past year or so. The western world- including New Zealand- has some serious trust issues. Not that you can blame us. Just three years ago, we became embroiled in the worst financial crisis since the Great Depression. Finance companies started falling over left, right and centre. Property developments came to a screeching halt, investors lost their life savings and overseas it became clear that some of the banks had been telling more than a few porkies. Now, in 2011, we are learning that entire countries are unable to pay their bills. Greece is teetering on bankruptcy and the USA has hit its debt ceiling.

All of this uncertainty means that the relationship between corporates, governments and the public is strained. Consumers simply don’t believe that businesses (or politicians…) are telling the truth. Nowhere is this more obvious than in the United States where, according to the 2011 Edelman Trust Barometer, the level of trust Americans feel towards businesses has plummeted from 54% to 46% since 2010. This puts them only 5 points above Russia, who are at the absolute bottom of the leader board. The UK is in an even worse state, at 44%. Not surprisingly, finance companies, banks, insurance providers and the media are least trusted, in all countries. Technology is far and away the most trusted at 81%.

Interestingly, the emerging countries are way ahead of us. This year, business trust in China jumped from 74% to 88%, while Brazil increased by a monumental 19 points to 81%.Some more insight into exactly why this has occurred would be fascinating and thoughts are welcomed from readers. Perhaps it is because they have been less impacted by the economic crisis? Is it a reflection of the increased global prominence businesses from these other countries are enjoying?

Globally, trust levels have increased slightly since 2010 but are still pretty dire. Internationally, 52% of people trust government, 49% trust media and 56% trust business. When looking at these figures, it must also be remembered that the huge successes of countries such as China, India and Brazil have helped boost this number. The western nations are struggling to keep up.

While some company heads might be wringing their hands and lamenting the loss of corporate trust across the developed nations, there is a silver lining. They are being presented with a golden opportunity to completely re-evaluate how they are engaging with their audiences. There is a clear need for them to reconnect with their consumers, be honest with them and slowly work on building those trust levels back up. 

For those industry leaders, there is another piece of good news. More people than ever now believe that CEOs are a source of credible, believable information. This has been particularly noticeable in Australia where trust in CEOs has increased by 30%.

All of this research further supports what a lot of us already believe. Business must align profit and purpose for social benefit. They must practice transparency and let their stakeholders know exactly what they are doing to benefit them, their family and their community. With a global rise in scepticism and the ever increasing demand for accountability, CEOs can no longer remain hidden in their boardroom. They need to open up a two-way dialogue between them and the people that matter- their customers, their investors, their employees. After all, everyone knows that without trust, any relationship, whether it is romantic or business related, simply cannot survive.