business must build on record high trust level

Trust across all Australian institutions has reached an all-time high, with trust in business recording the highest gains, the 2021 Edelman Trust Barometer has found.

“Leadership among the business community will be critical to Australia’s recovery, and we will be looking to them to step into less familiar areas and lead a coalition for progress,” said Michelle Hutton, CEO Australia and Vice Chair of Asia Pacific, Edelman.

Going against worldwide survey trend results across 27 countries, Australia as a country is leading global trust gains, as trust in Australian business eclipses that in government and NGOs for the first time, the survey shows. Trust levels have risen, resulting in significant gains for business (+11 points to 63), government (+17 points to 61), NGOs (+8 points to 62) and media (+12 points to 51). Australia’s overall trust index recorded the largest gain globally to sit at 59 points (+12 points).

Australians turned to their employers for guidance during the pandemic and employers now have a new role in the lives of their staff. “Having forged this bond, the opportunity exists for business to enrich their culture and drive deeper engagement in the post-COVID-19 era,” said Hutton. “Our study also shows that Australians are looking to their employers to engage on the pressing issues facing society – and businesses that take up this mantle stand to gain trust across the stakeholder ecosystem.”

As the most trusted institution and the second most trusted leaders behind scientists, employer CEOs will need to continue to do the right thing and step up to their new role in order to preserve their newfound trust, the survey says. Sixty-six per cent of respondents in Australia agree that CEOs should step in when the government does not fix societal problems, 72 per cent believe that CEOs should take the lead on change rather than wait for government to impose change on them, and 78 per cent believe CEOs should hold themselves accountable to the public, and not just to the board of directors or shareholders.

The survey asked 1,350 Australians questions on a range of topics between October and November 2020. While the survey found that Australians were most immediately concerned with job security after the pandemic, climate change ranked as the second biggest issue of concern – even above risks posed by the pandemic itself. Sixty-six per cent of respondents were concerned over the need to tackle climate change and are worried about its effects and 32 per cent said it was more important now than ever. In addition, 36 per cent of people said they were more afraid of climate change than they were of contracting COVID-19. Only 25 per cent of respondents were worried about the risk of infection.

In Australia, the findings reveal that all institutions are now perceived as ethical, and all are trending towards ‘competent’ territory, with business and NGOs seen as both competent and ethical. This is a stark shift from last year’s survey results, which found no institution to be ethical and competent. Business has emerged as the institution regarded as the most competent, sitting 30 points ahead of government and 12 ahead of NGOs. NGOs are seen as the most ethical institution, seven points ahead of business and government, and 13 points ahead of media.

Of those surveyed in Australia, only 36 per cent trust the board of directors (up one per cent from the 2020 survey) putting directors in ninth place behind academics, who were the most trusted at 58 per cent, government officials at 45 per cent and CEOs at 37 per cent.

The data also found that employees and consumers are expected to be taken into consideration when making business decisions, with 73 per cent agreeing that consumers have the power to force corporations to change, 66 per cent agreeing that employees have the power to force corporations to change and 59 per cent of employees more likely now than a year ago to voice their objections to management.

Pandemic accelerates global erosion of trust

Globally, the pandemic, which has caused the loss of more than 1.9 million lives and joblessness equivalent to the Great Depression, has accelerated the erosion of trust. Trust in boards of directors, CEOs, the US, China, the media and government have all fallen, according to this year’s global Edelman Trust Barometer. Trust in boards of directors has also fallen. Only 41 per cent of those surveyed internationally now regard the board of directors as a credible source of information about a company (down five points from 2020).

However, trust in business has also risen globally, which places the onus on business leaders to navigate a way out of the crisis and into the future, the global report says.

As trust in business increases, a growing distrust in public institutions due to the pandemic is threatening the worldwide vaccination drive, it says.

Trust in governments worldwide dropped to 53 per cent. On average, only 64 per cent of participants globally said they are willing to receive a vaccine, with people deeply hesitant and suspicious of consenting to the vaccine. “These pandemic fears are impeding a return to the workplace, with 58 per cent of employees [that are] choosing to work from home doing so out of fear of becoming infected.”

The report says that people don’t know where or who to get reliable information from. The global infodemic has driven trust in all news sources to record lows, with social media (35 per cent) and owned media (41 per cent) the least trusted; traditional media (53 per cent) saw the largest drop in trust globally at eight points down from last year’s survey.

“This rising tide of misinformation and mistrust is threatening COVID-19 recovery, as people are deeply suspicious and hesitant about the COVID-19 vaccine,” the report says. Only 15 per cent of Russians and 21 per cent of South Africans reported that they would take a vaccine as soon as possible.

The trust barometer, which conducted over 33,000 online surveys in 28 countries between October and November 2020, found that the public especially mistrusts the media, the US and China. “The US (40 per cent) and Chinese (30 per cent) governments are deeply distrusted by respondents from the 26 other markets surveyed.”

The study found that the public considers NGOs to be ethical, but less competent than they did previously, and both government and media to be unethical and less competent than before. In addition, 76 per cent of respondents said they place higher reliance and trust in their employers.

With levels of trust dropping in government, NGOs and the media, most people now rely largely on their employers for accurate information. “This year’s study shows that business is not only the most trusted institution among the four studied, but it is also the only trusted institution with a 61 per cent trust level globally, and the only institution seen as both ethical and competent,” the global report says.

“When the government is absent, people clearly expect business to step in and fill the void and the high expectations of business to address and solve today’s challenges has never been more apparent. The heightened expectations of business bring CEOs new demands to focus on societal engagement with the same rigour, thoughtfulness and energy used to deliver on profits,” it says.

Crisis of leadership

At the same time, levels of trust in CEOs have dropped globally, falling to all-time lows in several countries, including Japan (18 per cent) and France (22 per cent), making the challenge for CEOs even more acute as they try to address today’s problems.

“The urgent issues confronting society require a knowledgeable public able to make choices based on unbiased information – not fear, compulsion or conspiracy theories,” said CEO Richard Edelman in an essay published alongside the report. “Every institution must play its part in restoring facts to their rightful place at the center of public discourse as the essential step to emerging from information bankruptcy.”