Trust is increasingly a must

There’s an advert doing the rounds that has a ‘trust is a must’ payoff line and while I seem to recall that it’s for a homebuilding company, it would make a perfect slogan for a campaign on the key institutions of Australian society.

I was left with this prevailing thought after reading the somewhat alarming findings of a number of recent respected pieces of research, one the Edelman Trust Barometer and the other Roy Morgan Research. Both highlight that trust is a top priority and, in the case of the 2018 Edelman Trust Barometer – a global survey across 28 countries – it shows that each of Australia’s four key institutions of government, business, NGOs and media are among the least-trusted in the world.
Worse still, they are now officially classified as “distrusted” for the first time since 2013, with trust in government falling from 37 to 35 per cent, business from 48 to 45 per cent, media from 32 to 31 per cent and NGOs from 52 to 48 per cent.

The silver lining, I guess, is that directors appreciate that trust must be earned and maintained and they are increasingly asking questions about their organisation’s social licence – in other words, the role we, the people, play in how companies conduct their business.

Not that long ago, company reputation was a distant second to profit. But a more informed public, imbued with a newfound social conscience driven largely by an omnipotent social media where people have more information at their fingertips and the tools to effortlessly share it with vast audiences, has prompted the captains of industry to appreciate the importance of reputation.

The impact of reputation on business is obvious and potentially damaging: think of the backlash a well-known brand of sports shoes endured when we learnt that it used cheap labour in south-east Asia; or about the negatives for companies who use palm oil – and by definition, contribute to environmental destruction and vandalism – in their products.

The whole issue around trust is certainly gathering momentum, with a related consumer-driven move that demands substance over form.

The public wants business to become more involved in social issues, telling them that it is no longer good enough to, for example, donate to charities in the hope of looking like the good guys. Now, more substance, in the form of fundamental truth, honesty and integrity in the way they go about their day-to-day business, is a must.

A good example here is Qantas, who responded to the mood and sentiment of the country when it came to the question of same sex marriage. The national carrier was very public in trumpeting its support for the cause and emerged with its reputation flying high.

The challenge for boards, then, is to be absolutely conscious of the mood of the people when making decisions. Now, the three key questions that need to be asked when contemplating decisions are (i) is it legal, (ii) how will it improve the organisation and (iii) is it unequivocally ethical and reflective of the way society views the world?

A ‘yes’ to all will go a long way towards building trust; a ‘no’ to any, particularly the third consideration, will invariably lead to distrust.

Until next time,
Kate.

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4 thoughts on “Trust is increasingly a must

  1. Now, the three key questions that need to be asked when contemplating decisions are (i) is it legal, (ii) how will it improve the organisation and (iii) is it unequivocally ethical and reflective of the way society views the world?
    Maybe the first questions to be asked are, (1) have we got a good hold on what the question actually is / should be (2) are the members of the board appropriately committed to participation or is the group and preemptive think present (3) have we identified at least one other plausible option – then the next three might be Now, the three key questions that need to be asked when contemplating decisions are (4) is it legal,5® how will it improve the organisation and (6) is it unequivocally ethical and reflective of the way society views the world?

  2. Q3 is fundamentally wrong because; how society views the world isn’t necessarily unequivocally ethical, these two ideals are not mutually exclusive. Consider the following societies: Nazi German , white Australia policy and apartheid South Africa. Clearly the people within these societies had a very unethical view of the world.

    • Hi Colin, I agree completely and I suppose I was referring to what I would view as a decent society.
      Kind regards,
      Kate

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