Public trust in business remains relatively unshaken amid economic turmoil and a lingering pandemic, even as trust in the media and government falters, but leaders could do more to address social issues, new survey finds of world opinion.
However, not everyone trusts companies. While confidence is strong among those earning higher incomes, workers at the other end of the pay scale are more skeptical, according to the latest Edelman Trust Barometer report.
Respondents in all fields also expect business to step up and help correct social problems, according to the new survey, “The Changing Role of Business in Society,” conducted by the Edelman Trust Institute in collaboration with the new institute of Harvard Business School. for the study of business in the global society.
“There’s definitely been a shift in people’s expectations of businesses.”
Companies should take a leading role not only on economic issues, but also on social and environmental issues, such as climate change, racism, wage inequality and job losses due to automation, according to the online survey. It was conducted in May with 14,000 respondents in 14 countries.
Companies and their CEOs should also put the interests of their customers and employees first, respondents say, as they express frustration that senior executives are too focused on the concerns of shareholders and business owners.
The survey serves as a wake-up call for many business leaders who need to rethink their priorities and influence the world in more positive ways, says Sandra Sucher, professor of management practices at HBS and internationally recognized trusted researcher.
“There’s definitely been a shift in people’s expectations of companies,” says Sucher, who served as a research adviser to the survey, alongside Peter Tufano, Baker Foundation professor at HBS, and Debora Spar, Jaime and Josefina Chua Tiampo. Professor of Business Administration. Spar also leads the new institute as senior associate dean for business and global society.
“People want brands to make good decisions about where their products are made, how they’re made, and what impact they have on the environment,” she says. “They want there to be transparency about what the product does.”
Here are five key takeaways from the new study.
1. Businesses are the most reliable and only sector
Respondents say they trust companies more than governments, advocacy organizations and the media. Specifically:
- 61% say they trust companies. Little change from 62% in May 2020, around the start of the COVID-19 pandemic;
- 52% trust governments, up from 65% in 2020, when they were the most trusted institutions in the world;
- Trust in the media fell to 50% from 56% in 2020, while non-governmental organizations fell to 59% from 62% two years ago.
Edelman’s Trust Barometer considers an industry ‘trusted’ if it garners more than 60% positive opinions from respondents.
2. Maximizing profits is not enough
Respondents say companies give too much respect to their shareholders and owners. The vast majority of respondents, 73%, say business should benefit all stakeholders instead of maximizing financial returns.
Sixty-four percent say companies should put customers first when making decisions, but only 53% think companies actually do. The sector is seen as failing by other stakeholders, with only 44% saying companies consider the interests of employees and 39% saying they put future generations first.
3. People in fragile financial situations are wary of companies
Overall, the survey revealed a record 15 percentage point confidence gap between respondents in the highest quartile income segment and those in the lowest quartile. While 62% of high-income respondents say they trust businesses, low-income people express strong distrust, with only 47% of them.
And in the United States, the gap was even wider, with 61% of high-income people expressing confidence compared to just 38% of low-income people.
4. Most believe businesses can improve society
Nearly a third of respondents say businesses could have a “decisive positive impact” on wealth inequality, while a further 42% see the potential for at least a small or modest impact.
The majority of respondents say businesses have the power to mobilize other social change, with 70% noting climate change, 67% citing automation-related job losses and 66% citing racism.
In addition to creating wealth for shareholders and owners, survey respondents say companies have a responsibility to train and “reskill” workers, support local communities and work to address key issues. global.
5. CEOs need to speak up
More than 70% of respondents want CEOs to contribute to policy debates and discussions about climate change, pay inequality and how automation affects jobs. More than half say CEO participation should be mandatory.
Sixty-eight percent say CEOs should take action on issues related to bias and discrimination. And 68% want CEOs to take the lead in making change, rather than waiting for governments to impose demands on them. Most also want to hear directly from the CEO on contentious social issues, not from other executives, board members or spokespersons.
Building trust through concrete actions
One of the survey’s key findings for businesses is that customers, employees, community leaders and others closely monitor not just what business leaders say, but what they actually do. said Sucher.
It may no longer be enough for CEOs to hang their heads and focus solely on growing their business. Having a strong track record of economic growth is not as powerful in building public trust as ensuring access to accurate information, providing employee training and supporting local communities.
“Trust is built by actions,” says Sucher, co-author of The Power of Trust: How Companies Build It, Lose It, Regain It.
“You can’t work your way into trust,” Sucher says. “You must do as you please in confidence.”
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