Ethos – what you believe in, what you value – is at the heart of belonging. 21st century business, institutions and society are complex. It is essential to guide our ethics and behaviour. And right now our institutions are failing fast.
For 20 years, the Edelman Trust Barometer has gauged trust by asking: “How much do you trust this institution to do what is right?” This year’s results, hot off the press, make for grim reading. Despite a strong global economy and near full employment, the study finds that none of the four big societal institutions – government, business, NGOs and media – is trusted.
The big message:
“No institution is seen as both competent and ethical”
The survey finds that people grant their trust based on two distinct considerations: competence and ethical behaviour. And it’s clear that ethics leads – and it’s not enough to say so. Business and institutions have to show us, give us a reason for good faith: why should we believe you? There has been too much reason in recent years for people to be cynical.
“Ethical attributes drive 76 percent of the trust capital of global companies, while competence drives 24 percent.”
Richard Edelman CEO comments in the Executive summary
For the study Edelman polled 34,000 respondents in 28 markets. The 20th Trust Barometer found pessimism is being fuelled by a growing sense of inequity, unethical business practices, dishonest politicians, and fear the pace of technological change.
- None of the main four institutions – NGOs, Business, Government and Media – is trusted
Employees’ lack of trust:
- A stunning 92% of employees surveyed say that they expect their employer’s CEO to speak up on one or more issues ranging from income inequality to diversity and training for jobs of the future.
- 73% of employees expect a prospective employer to offer the opportunity to shape the future of society in a positive way.
- 83% of employees fear losing their jobs due to causes like freelance/gig economy, looming recession, lack of training, immigrants who work for less
Inequity, and fears over hopes about current systems:
- A growing sense of inequity is undermining trust: Trust inequality sets new records
- 56% of people believe capitalism as it exists today does more harm than good in the world
- Less than 1 in 5 respondents agree that the system is working for them
- Less than 1 in 3 people in developed markets believe they and their families will be better off in five years’ time
- No institution has a vision for the future that a majority of respondents believe in: government (35 percent); media (35 percent); business (41 percent); NGOs (45 percent).
Expectations for business:
- An overwhelming number of respondents believe that it is the duty of business to pay decent wages (83%) and provide retraining for workers whose jobs are threatened by automation (79 %).
- Yet less than a third of people trust that business will do these.
- Both business and government can take specific actions to achieve a higher trust score. Respondents expect business to focus on paying fair wages and retraining.
Call for collaboration over partisanship:
- For government, the actions include reducing partisanship, addressing community-level problems and partnering with business and NGOs.
And yet this year’s findings are against a backdrop of strong economy. So why the paradox?
“The cause of this paradox can be found in people’s fears about the future and their role in it, which are a wake-up call for our institutions to embrace a new way of effectively building trust: balancing competence with ethical behavior… explaining stagnating trust in the face of strong economic performance.”
What’s the role for business?
“Business once paid only lip service to this kind of societal discontent but now it has leapt into the void left by populist and partisan government. It’s no longer business as usual, with an exclusive focus on shareholder returns.
Business now sees the need to play a positive role in global governance.
The decision by the (US) Business Roundtable to endorse a multi-stakeholder model for American multi-nationals; the initiation of Business for Inclusive Growth focused on fair wages by French multi-nationals; and the signing by 177 multi-nationals to the Business Ambition for 1.5°C are definitive steps toward an essential role for business as a means of improving society.
These are incredibly positive developments, led by CEOs who understand that their mandate has gone beyond corporate social responsibility to fundamental operational change”
Who do we trust, if anybody?
Cynicism is high. A sense of unfairness around our current economic systems and rewards. Deep-seated fears about the future.
“A lack of confidence in societal leaders, the stewards of the future, is pervasive.”
“These findings are emblematic of one of the major trust trends of the past two decades: the shift from top-down to horizontal influence.”
“66% say “I do not have confidence that our current leaders will be able to successfully address our country’s challenges.”
The only people who are trusted are…
- Scientists 80%
- Community Members 69%
- Citizens of my country 65%
Business leaders in the neutral zone…
- CEOs 51%
Low levels of trust
- Religious Leaders 46%
- Government Leaders 42%
And at the lowest…
- The very wealthy 36%
UK is world’s 2nd-least trusting global population – Only Russia ranked below
The section on the UK, in the Exec Summary, is headlined gloomily: The UK: A Parable of Distrust.
Dishonest, divisive politics leading to disenchantment with democracy has contributed to the UK population becoming the second-least trusting in the world. Only Russia is ranked below the UK.
“A toxicity has overtaken the tone of the UK’s internal conversation…. Almost 70% [in UK] agree with the sentiment that “democracy is losing its effectiveness as a form of government.”
“It would be a mistake to think that Brexit alone was to blame for this lack of trust in our institutions. While Brexit did prove to be the spark that lit the gunpowder, the conditions were set by years of institutional failures”
Ed Williams, Edelman President and CEO, EMEA
A key way for UK business to rebuild trust is in collaboration with both government and NGOs.
“Undoubtedly, the way in which business and government co-operate will determine how they are judged. Their reputations are inextricably linked in the minds of two-thirds of the British public, and three-quarters of them want to collaborate to solve social issues.”
Echoes in the IBE survey of ‘Attitudes of the British public to business ethics’
For further reading… The Edelman survey is complemented by the 2019 findings of the Institute of Business Ethics’ annual survey of the ‘Attitudes of the British public to business ethics’.
“Just over half (57%) of the British public now say that they consider British business to behave ethically, compared to 62% last year and 47% in 2003 when the survey was first launched.”
Percentage of people finding British Business ‘Very or Fairly Ethical’ has gone down:
- 57% in 2019
- 62% in 2018 (at its highest point since the survey began in 2003)
Percentage of people finding British Business ‘UnEthical’ has gone up:
- 34% in 2019
- 30% in 2018
The top three issues concerning the public have remained the same in 2019:
- Tax avoidance
- Environmental responsibility
- Executive pay
More detail from the IBE in this link to their infographic:
What’s the implication?
With such stark lack of trust in either competence of ethics, and increased cynicism in Government, the Media and even in NGOs, the tone of the Edelman report places most optimism in business. The confidence is in recent active commitment to greater ethical standards.
“Business has been prompted to action by the recognition that stakeholders now have new expectations of the corporate sector.”
Ask of your own organisation:
- How strong is your organisation’s ethos?
- How well do your people understand how to put ethics into action?
- How would you score against some of the big questions in the Edelman Trust Barometer?
Trust starts with Ethos at the heart of belonging
So begin by showing – not just telling – us what your ethics are and how competent you are at living up to this. Go for commitment, not just compliance, or what you can get away with.
How do your people, customers and investors know what it means to belong to your business?
Start with a clear commitment to shared ethos. Build ethics and competence around this.
Business can only build trust by doing the right thing, competently and reliably. Show us why we should believe you. And stick to it.
We’re happy to chat through how you build a culture of ethics into your business.
Contact us at email@example.com
07792 433680 www.belongingspace.com
Edelman Trust Barometer 2020 – Executive Summary
Edelman Trust Barometer 2020 – Full report
Edelman Trust Barometer 2020 – Press Release
IBE 2019 survey of the attitudes of the British public to business ethics – Report
IBE 2019 survey of the attitudes of the British public to business ethics – infographic: