Post By: Pamela Harper
Trust: it is the glue that binds corporate culture. The benefits of organizational trust are widely recognized, from promoting innovation and better decision-making to enhancing employee engagement, and by extension, employee retention. Similar to diversity and inclusion, there is a business case for trust as well. According to Trust Across America, whose mission is to enhance trustworthy behavior in organizations, the top 10 most trustworthy public companies outperformed the S&P 500 by over 25%. And yet, notwithstanding the evidence and trust’s central role in defining culture, there is a global trust deficit.
The Edelman Trust Barometer analyzes trust globally, across 28 different markets and among four different types of institutions: business, government, media, and non-governmental organizations (NGOs). This year’s study examined how these organizations are perceived against the two primary dimensions of trust: competence and ethical behavior.
Among its key findings:
- None of the organizational types are perceived as both competent and some fare better on one dimension but score poorly on the other. Business organizations, for example, are perceived as competent but ethically challenged whereas NGOs ranked high on the ethics scale, but are perceived as less than competent, compared to business. Finally, the media and government, again, on a global scale, are perceived as not particularly competent or ethical, with government scoring the worst on both scales;
- Ethical drivers, such as integrity, purpose, and dependability, are three times more important than competence, driving 76% of an institution’s trust;
- 87% of respondents indicated that customers, employees, and communities are more important to long-term company success than shareholders; and
- 92% of employees expect CEOs to speak out on issues, such as automation’s impact on jobs, the ethical use of technology, diversity and inclusion, climate change and immigration, among others.
The Barometer’s findings remind us as compliance professionals that:
- Trust is not elastic. Rather, it is integral to an organization’s culture and credibility, internally among employees as well as externally to customers, vendors, and the broader community. To ignore the importance of trust is to jeopardize and squander an organization’s cultural capital.
- Ethics play an outsized role in the trust equation. It is not the only driver, but clearly it is the major driver of trust and, consistent with an effective compliance program, demands not just C-suite attention but C-suite commitment.
- Leadership is not fungible. CEOs are now expected to lead in new and different ways as well as to take positions on social and environmental issues. Some have been more agile than others. Andrew Anagnost, CEO of Autodesk, for example, has spoken candidly about the responsibility of technology companies, in moving towards automation, to do so “ethically, morally, and in a way that benefits society” and to help people through the “valley of dread” during the transition.
Through overseeing the development of effective compliance programs by promoting organizational cultures that encourage ethical conduct, compliance and ethics professionals, we play a powerful role in shaping the dialogue on trust. We are the trust influencers.
About the Author: Pamela M. Harper is a Member of Griesing Law, LLC and Chair of the Firm’s Corporate Transactions & Compliance and Government & Regulatory Affairs practice groups. Her focus is on representing and providing strategic advice to clients in connection with regulatory, compliance and corporate governance-related matters, particularly within the financial services industry. Pam can be reached at [email protected] or 215.501.7852.