Public trust in business remains relatively unshaken amid economic turbulence and a lingering pandemic, even as faith in the media and government falters, but leaders could do more to address social issues, a new global opinion survey shows.
However, not everyone trusts businesses. While trust is strong among people earning higher incomes, workers at the other end of the pay spectrum are more skeptical, according to the latest Edelman Trust Barometer report.
Respondents across the board also have high expectations that business will step up and help correct social problems, finds the new survey, “The Changing Role of the Corporation in Society,” conducted by the Edelman Trust Institute in collaboration with Harvard Business School’s newly launched Institute for the Study of Business in Global Society.
There definitely has been an evolution in the expectations people have of business.
Business should take a leading role not just on economic matters, but also social and environmental ills, such as climate change, racism, wage inequality, and job losses due to automation, according to the online survey. It was conducted in May with 14,000 respondents in 14 countries.
Companies and their CEOs should also put the interests of their customers and employees first, respondents say, as they express frustration that top executives are too focused on the concerns of shareholders and business owners.
The survey serves as a wakeup call to many business leaders who need to rethink their priorities and influence the world in more positive ways, says Sandra Sucher, professor of management practice at HBS and an internationally recognized trust researcher.
“There definitely has been an evolution in the expectations people have of business,” says Sucher, who served as a research adviser on the survey, along with Peter Tufano, Baker Foundation Professor at HBS, and Debora Spar, the Jaime and Josefina Chua Tiampo Professor of Business Administration. Spar also leads the new institute as the senior associate dean for business and global society.
“People want brands to make good decisions on where their products are made, how they are made, and what impact they have on the environment," she says. "They want there to be transparency on what the product does.”
Here are five key takeaways from the new study.
1. Business is the most—and only—trusted sector
Respondents say they trust companies more than governments, advocacy organizations, and the media. Specifically:
61 percent say they trust business. Little changed from 62 percent in May 2020, near the start of the COVID-19 pandemic;
52 percent trust governments, down from 65 percent in 2020, when they were the world’s most trusted institutions;
Trust in the media fell to 50 percent from 56 percent in 2020, while nongovernmental organizations sank to 59 percent from 62 percent two years ago.
The Edelman Trust Barometer considers a sector “trusted” if it earns more than 60 percent positive sentiment from respondents.
2. Maximizing profits is not enough
Respondents say companies are giving too much deference to their shareholders and owners. The vast majority of respondents, 73 percent, say business should benefit all stakeholders instead of maximizing financial returns.
Sixty-four percent say companies should put customers first when making decisions, but only 53 percent think that businesses actually do. The sector is seen as failing other stakeholders, with only 44 percent saying business considers the interests of employees and 39 percent saying it prioritizes future generations.
3. People in fragile financial positions distrust business
Globally, the survey revealed a record trust gap of 15 percentage points between respondents in the highest quartile income segment and those in the lowest quartile. While 62 percent of high-income respondents say they trust business, low-income earners conveyed a strong distrust, with just 47 percent trusting business.
And in the US, the gap was even greater, with 61 percent of high-income people expressing trust compared to only 38 percent of low-income people.
4. Most believe business can change society for the better
Almost a third of respondents say business could have a “game-changing positive impact” on wealth inequality, while an additional 42 percent see the potential for at least a small or modest impact.
The majority of respondents say business has the power to mobilize other social changes, with 70 percent noting climate change, 67 percent citing job losses related to automation, and 66 percent saying racism.
In addition to creating wealth for shareholders and owners, survey respondents say companies have a responsibility to train and “reskill” workers, support local communities, and work to solve major global problems.
5. CEOs need to speak up
More than 70 percent of respondents want CEOs to contribute to debates and policy discussions about climate change, wage inequality, and how automation affects jobs. More than half say that CEO participation should be mandatory.
Sixty-eight percent say CEOs should weigh in on issues involving prejudice and discrimination. And 68 percent want CEOs to take the lead on making changes, rather than waiting for governments to impose requirements on them. Most also want to hear directly from the CEO on contentious social issues, not from other executives, board members, or spokespeople.
Building trust through tangible actions
One of the survey’s main conclusions for business is that customers, employees, community leaders, and others are watching closely to see not just what business leaders say, but what they actually do, Sucher says.
It may no longer be enough for CEOs to put their heads down and just focus on growing their firms. Having a strong record of economic growth is not as powerful in driving trust among the public as ensuring access to accurate information, providing training to employees, and supporting local communities.
“Trust is built through actions,” says Sucher, coauthor of the book “The Power of Trust: How Companies Build It, Lose It, Regain It.”
“You can’t talk your way into trust,” Sucher says. “You have to act your way into trust.”
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Image: iStockphoto/FredFroese