Which organizations do you trust? Government? The media? Business? The Covid-19 pandemic has had a keen impact on how consumers feel about institutions, and it may surprise you that business is actually the most trusted institution in the U.S. — for the fourth year in a row, according to Edelman’s Trust Barometer. A PwC study yielded similar results, finding that 63% of consumers say they have trust in U.S. companies.
Our survey found that this endorsement of business can be at least partially attributed to the commitments and actions so many in the business community made during the pandemic. Advocating for social justice, protecting communities and the economy by keeping people safely at work, continuing the supply of household goods, fast-tracking vaccine production, providing small business loans, raising wages, and charitable commitments all had an impact on trust and reputation. So, yes, the business community stepped up in significant ways, yet we all recognize that there is more work to do.
The opportunity now for business leaders is to protect the progress that has been made and to manage trust as carefully as we do our balance sheets. Leaders can achieve this by assessing what earns trust, setting matching priorities, monitoring progress, and taking quick action to admit and fix problems when they occur.
I’ve seen large health care companies invest real money to target the social, environmental, and economic factors that affect health — increasing trust by striving to improve health outcomes for their customers and communities. I’ve seen financial institutions commit to customers that their money will never go to investments that could hurt the environment — increasing trust that ethical business practices guide them. I’ve seen companies raise wages of the lower paid. I’ve also seen executives’ pay docked if they fail to meet diversity targets for their workforce — increasing trust that inclusion is a requirement, not a PR campaign.
Unfortunately, trust violations are common too. We all give some companies our personal data, trusting that they will protect it and use it responsibly, yet data breaches and questionable uses of consumer data take place every day. Many of us direct our savings to environmental, social, and governance (ESG) investments, trusting that our money won’t be used to harm the planet. But some companies may be tempted to exaggerate ESG claims, causing governments and regulators to examine assets with green or socially conscious labels.
These opportunities illustrate why it’s so important for business leaders to understand what drives trust. In our recent survey, we found that consumers and companies agree on four actions that help establish trust:
Data protection and cybersecurity
Treating employees well
Ethical business practices
Admitting mistakes quickly and honestly
There are many examples of businesses that have made a great deal of progress across these areas over the years, and many continue to improve.
Of equal importance is identifying where business leaders and consumers disagree. Our survey found that how companies manage their value chains, deploy responsible artificial intelligence, and report on ESG actions are all highly rated trust factors by business leaders, but of lesser importance to consumers.
It’s worth noting the disconnect on ESG. Consumers do indeed care about companies’ environmental and societal impact and if they are ethically governed. However, many businesses have not yet taken the time to connect the dots between their ESG-related actions and how they impact the average consumer.
This gap in what consumers say increases trust and what businesses are actually doing is also evident in the area of accountability. Consumers want oversight from leadership. They want businesses to take responsibility for their failures quickly and demonstrate action to address those failures. However, fewer than half of businesses responding to our study have implemented formal initiatives related to accountability.
Why this misalignment in priorities? It may be because right now there is no one role in the C-suite that truly owns trust. Our survey found that in most companies, all C-suite roles were at least partly responsible, which makes accountability and alignment difficult.
So, what are the key takeaways for the business community?
1. It’s time to galvanize around trust and transparency.
To do so, tomorrow’s business leaders should set a clear strategy to build a culture of trust and transparency throughout the company. For example, one year ago, we at PwC took the important step in releasing our workforce demographics for the first time. We did it because diversity and inclusion are core to our purpose at PwC, and we wanted to apply greater rigor, accountability, and transparency into how we were continuing to drive our firm’s representation and culture of belonging.
We also did this to help foster trust. We want our stakeholders, including employees, as well as the broader community to know we are serious about DEI, and we are holding ourselves accountable to reaching our goals. While we are energized by the progress we’ve made, we recognize we have more work to do — and we remain committed to publicly sharing our progress through our Purpose Report.
2. To build trust, leaders need to communicate the “why” behind big decisions.
When done effectively, taking a multi-stakeholder approach to building trust can create a positive feedback loop that can be a true force multiplier.
For example, at PwC, we recently went through a historic transformation that included a brand refresh and a bold new strategy that we call The New Equation. Any change of this magnitude was bound to result in some discomfort among our broad network of stakeholders, but, this time, how we addressed their potential concerns and questions was different. We communicated not just the “what” but the “why” to our broad group of stakeholders — not just clients and our employees, but also regulators, analysts, alumni, the business community, NGOs and NPOs, future talent, and so on.
We also made sure to tailor our communications to each stakeholder audience to foster a better understanding. This was very important to motivate each stakeholder audience to come along on the journey with us.
3. Leaders need to act with integrity, courage, and vulnerability.
When mistakes happen, as they inevitably will, leaders should make a sustained, transparent commitment to make things right.
For nearly 90 years, our firm has had the great privilege of tabulating the votes for the Academy Awards ceremony and identifying the winners. During the 2017 Oscars, one of our PwC partners mistakenly handed a presenter the wrong envelope. On behalf of our firm, I immediately took responsibility. I personally reached out to dozens of people who were impacted, including producers, presenters, stage managers, and filmmakers. In the months that followed, we took swift action to understand how the mistake was made, and we worked closely with the Academy to design new protocols and safeguards to prevent the mistake from happening again. We did this because it was the right thing to do and wanted to regain trust with our client, our collective stakeholders.
I believe our recent study is good news for business and society. Our business community has come a long way in building trust with consumers and putting greater social needs in line with the responsibility to grow revenue. While it’s a hill we are still climbing, we are capturing the opportunity to make positive, lasting change for our stakeholders and society at large — and that is a step in the right direction.
By Tim Ryan