Even as trust in the media and government has been shaken amid economic turmoil and a protracted pandemic, public trust in business remains relatively intact, but leaders are concerned that more can be done to address social issues. , a new global opinion poll shows.
However, not everyone trusts companies. The latest Edelman Trust Barometer report finds that while trust is strong among those earning high incomes, workers at the other end of the wage spectrum are more skeptical.
A new study, “The Changing Role of Corporations in Society,” conducted by the Edelman Trust Institute in collaboration with Harvard Business School’s newly launched Institute, also found that respondents across the board believe that corporations are becoming stronger and more capable of solving social problems. It turns out that they have high expectations for contributing to the Learn about business in a global society.
“The expectations that people have of business are definitely evolving.”
Companies should play 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 an online survey. The survey was conducted in May among 14,000 people in 14 countries.
Respondents expressed frustration that top executives give too much weight to the concerns of shareholders and business owners, saying that companies and their CEOs need to put the interests of customers and employees first. ing.
This research should serve as a wake-up call to many business leaders who need to rethink their priorities and impact the world in a more positive way, said HBS professor of management practice and internationally recognized trust researcher. Sandra Sucher said.
“There has definitely been an evolution in the expectations people have of business,” said HBS Baker Foundation Professor Peter Tufano, along with Deborah Spahr, Jaime Chua Tiangpo and Josefina Chua Tiangpo. Sucher, who served as the research advisor, said: Professor of Business Administration. Mr. Spahr will also lead the new institute as senior associate dean for business and international society.
“People want brands to make good decisions about where their products are made, how they are made and what impact they have on the environment. We want to be transparent about what we do,” she says.
Here are five key takeaways from the new study.
1. Business is the most and only sector you can trust.
Respondents say they trust businesses more than government, advocacy groups and the media. in particular:
- 61% say they trust businesses. This is little changed from 62% in May 2020, when the novel coronavirus disease (COVID-19) pandemic was just beginning.
- 52% trust government, down from 65% in 2020, when it was the world’s most trusted institution.
- Trust in the media fell to 50% from 56% in 2020, and trust in non-governmental organizations fell to 59% from 62% two years ago.
The Edelman Trust Barometer considers sectors to be “trusted” if they receive 60% or more positive sentiment from respondents.
2. Maximizing profits is not enough
Respondents say companies treat shareholders and owners with too much respect. A majority of respondents, 73%, say companies should benefit all stakeholders, rather than maximizing economic profits.
64% think businesses should put customers first when making decisions, but only 53% actually do so. The sector is seen as disappointing other stakeholders, with only 44% saying their companies consider the interests of their employees and only 44% saying they prioritize future generations. was 39%.
3. People with weaker finances are distrustful of business.
The survey found that globally, there is a record 15 percentage point trust gap between respondents in the highest and lowest income quartiles. While 62 percent of high-income respondents said they trust businesses, low-income respondents showed strong distrust, with just 47 percent trusting businesses.
And in the U.S., the gap is even wider: 61% of high-income people express confidence, compared to just 38% of low-income people.
4. Most people believe that business can change society for the better.
Almost a third of respondents said business could have a “transformative positive impact” on wealth inequality, and a further 42% said it could have at least a small or moderate impact. I see it as having sex.
A majority of respondents said business has the power to drive other social changes, with 70% citing climate change, 67% citing automation-related job losses, and 66% citing racial discrimination. .
In addition to creating wealth for shareholders and owners, survey respondents believe that companies have a responsibility to train and “reskill” employees, support local communities, and work to solve critical global problems. It states that there is.
5. CEOs need to speak up
More than 70% of respondents want CEOs to contribute to discussions and policy debates about climate change, wage inequality, and the impact of automation on jobs. More than half said CEO participation should be mandatory.
68% say CEOs should consider issues involving bias and discrimination. And 68% want CEOs to take the lead in making changes, rather than waiting for governments to impose requirements on them. Additionally, many people want to hear directly from the CEO about controversial social issues, rather than other executives, board members, or spokespeople.
Build trust through visible actions
One of the main conclusions of this research for business is that customers, employees, community leaders and others are paying close attention to what business leaders are actually doing, not just what they say. Sucher says.
It may no longer be enough for CEOs to keep their heads down and focus solely on growing the company. Having a strong track record of economic growth is not as powerful in increasing public trust as ensuring access to accurate information, providing training to employees, and supporting local communities.
“Trust is built through action,” says Sucher, co-author of the book “The Power of Trust: How Companies Build It, Lose It, Regain It.”
“You can’t talk to earn trust,” Thatcher said. “You have to act in your own way to earn trust.”
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Do you have feedback or ideas to share? Email the Working Knowledge team at hbswk@hbs.edu.
Image: iStockphoto/FredFroese