World events that defined the past year have ushered in a new era, marked by political shifts and economic upheavals. Thus, it's no surprise that the public's trust in global institutions, including business, government and media, is in the midst of a free fall--at least, according to the recently released results of the 2009 Edelman Trust Barometer.
The barometer, which has measured the levels of trust among global elites (specifically, "informed publics" who meet a number of criteria) for a decade, found that trust in business has plummeted to its lowest level in 10 years, with 62% of respondents globally claiming to trust corporations less than they did a year ago, and a staggering 77% agreeing with that sentiment in the U.S. When asked if they trusted U.S. business to do the right thing, only 38% responded affirmatively, down from the 58% who did so last year.
And why not? After a financial system defined by greed initiated a domino-effect economic collapse around the world, history's largest Ponzi scheme became public and auto industry leaders begged for bailouts in Washington, it's not difficult to justify pervasive skepticism.
"The findings are reasonably intuitive," says Matt Harrington, president and CEO of Edelman U.S. "That said, the extent of the drop in the trust in business is still extraordinary."
Extraordinary indeed, but business wasn't the sole target of respondents' criticisms; media and spokespeople took a big hit as well. Among the findings:
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In the U.S., trust in information from a company's CEO is at a six-year low of 17%;
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Trust in business magazines and stock/industry analyst reports is down from 57% to 44%, and from 56% to 47%, respectively;
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Trust in television news coverage dropped from 49% to 36%, and trust in newspaper articles fell from 47% to 34%;
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Only 29% and 27% view information as credible when coming from a CEO or government official, respectively, down from 36% and 32%; and,
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Outside experts are still considered to be the most trusted source of information about a company, with 59% of respondents saying an academic or expert on a company's industry or issues would be "extremely" or "very" credible.
With trust levels at such abysmal lows, it is important to understand the significance of trust's impact on institutions in the first place. The barometer's data affirms that trust affects consumer spending and corporate reputation.
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In the past year, 91% of global respondents said they bought a product or service from a company they trusted, and 77% refused to do so from a company they didn't trust;
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Being able to trust a company ranks just below the quality of a company's products and its treatment of employees in determining its reputation. It is on par with a company's financial future and it is considered more important than job creation and innovation; and,
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Trust affects an individual's decision to buy or sell shares in a company, and to share positive versus negative experiences via online channels.
In line with recent policy changes that have come with the new administration, the Trust Barometer also revealed an increasing focus on the role governments can play in regulating business. When asked, "How strongly do you agree or disagree that your government should in the future impose stricter regulations and greater control over business across all industry sectors?," 65% of global respondents agreed--a significant gesture to the growing belief that businesses can no longer operate with a laissez-faire mentality.
"The biggest learning is the degree to which those surveyed recognize the importance of private-public partnership," Harrington says. "Corporations need to engage with Washington in ways that are more conversational and relationship-driven than they've been in the past." (For more on regulatory communications, see "Under the Microscope: A New Regulatory Age Requires Increased Transparency," PRN 01-26-09.)
Based on the overall findings, the Trust Barometer report identified four pillars of a strategy to engage the public and rebuild trust: private sector diplomacy, mutual social responsibility, shared sacrifice and continuous conversation.
"Those are the four buckets that [define] how to communicate," Harrington says. "The shared sacrifice piece is especially interesting. A lot of people have interpreted that as CEOs taking pay cuts, but it's more. It's about coming to the table and acknowledging that we're all in this together, and we all need to work together to move forward." PRN
CONTACT:
Matt Harrington, matthew.harrington@edelman.com