The COVID-19 global pandemic has led to profound shifts in trust across the globe. But while trust in government has hit an all-time high, trust in business continues to fall below community expectations. So why is business falling short? And how can boards and business leaders navigate the new normal in a way that strengthens the standing of business within the community?
The COVID-19 global pandemic has led to profound shifts in trust across the globe. Edelman were propelled to produce a Spring Update in May, following the January launch of their well-known Trust Barometer which had quickly become redundant. They described the trust shifts since January as ‘remarkable’, identifying a surge in trust in government, positioned as the most trusted institution for the first time in the 20-year history of the initiative. In Australia, the trust shift to government was described as ‘newfound’, particularly as trust in government, which was already low, had further declined following the bushfire response and despite 28 years of consecutive economic growth.
Trust in news sources shot up to an all-time high as people searched for reliable information (although calls for credible and unbiased journalism have continued to gain strength). The rise of trust in, and reliance on, experts has continued. In contrast to these trust rises, there has been a ‘marked disappointment’ in the performance of business, particularly during the early months of the crisis. A moment of ‘reckoning’ for business was declared - the outcome of which is still to be decided.
The trust pressure points for business
In recent year, trust surveys have identified an expectation that CEO’s and business should lead on positive change in society, and yet in surveys since COVID-19, CEOs have ranked last indicating they are not meeting these expectations. Academics have ranked first, followed by government. Perhaps, these shifts are to be expected given the nature of the pandemic, involving health and economic impacts across the whole of society. However, it’s worth understanding where people believe business is falling short.
Areas that have been identified, and echoed through media scrutiny, include:
- Putting profits before people;
- Not safeguarding enough jobs;
- Not protecting the financial wellbeing of staff and customers; and
- Not doing enough to assist suppliers, contractors and business customers to stay in business.
The challenge for businesses and their boards
Business leaders and their boards have had to quickly become accustomed to meeting virtually and making decisions on rapid timeframes. It’s therefore understandable that some view the criticism of their response to the pandemic as unfair. Many have quite simply been dealing with the pressing issue of staying in business.
However, as businesses and boards now navigate the ‘new normal’, they will be called on to:
- Support employees, most notably there is pressure to avoid workforce reductions or at minimum manage them fairly; and
- Support customers and suppliers, particularly those experiencing vulnerability.
These expectations are beyond what might have historically been reasonably expected and apply most absolutely to those with market power.
The pandemic has brought to the fore, in a way that can’t be ignored, the inequity that exists in even the most developed economies. Practices that had otherwise become accepted, such as widening CEO and staff pay differentials, and profit concentrations made possible through the use of shadow workforces comprised of contractors and gig workers, will continue to be called into question. Finally, the decisions of boards will be judged by changed expectations and in an environment where people are considering who deserves their trust.
Ethics and trust remain inextricably linked, the challenge for leaders is therefore to maintain both as they face the year ahead.