Trust is critical to the maintaining an organisation’s social licence to operate. This new report shows that directors are acutely aware of the need for their organisations to maintain trust with stakeholders amid generally declining trust in all institutions.
As the ‘crisis of trust’ in institutions continues to dominate global and national headlines, encouraging conversations are being held in Australian boardrooms where trust remains front of mind.
In a survey together with KPMG, completed by almost 600 company directors, directors overwhelmingly agree that trust is important to their organisation's sustainability.
Boards are increasingly looking to better understand, and respond to, the issues that are affecting their organisation’s trustworthiness.
Specifically, the survey found that:
- Almost half of directors reported that their board had to deal with issues that can affect trust in their organisation over the past year
- Boards see 'clients or customers' and 'employees' as the two most critical stakeholders to maintain trust in an organisation.
- Less than half of company directors who responded felt that their board has a proactive approach to building trust with the organisation's most important stakeholders.
- Although company directors feel a greater sense of responsibility to the wider communities they serve, 'internal culture and practices' was voted by directors as the most critical issue relating to trust.
- The factors contributing to trust are more dynamic and interrelated than ever before. There are simply too many issues to address them all with the same level of focus; boards must prioritise and focus on those that are most likely to impact their organisation and its stakeholders. The results, however, suggest a mixed picture in the extent to which organisations have formal processes for escalating trust issues to the board level.