The leaders of businesses, governments and other major institutions throughout the developed world face a major challenge: how to rebuild trust between themselves and their key stakeholders. The 2017 Edelman Trust Barometer makes for sobering reading, revealing the biggest-ever drop in public trust in business and political leaders: Trust in trust major U.K. institutions is at an historic low of 29 percent. For business leaders, it languishes at 33 percent, while CEO credibility is at an all-time low of 37 percent.
It is not hard to see why. Trust requires a shared belief that each party in a relationship is acting for some mutual benefit and is not solely driven by self-interest. Many large organizations appear to have lost sight of this basic truth. Take the case of the recent scandal at Wells Fargo in the U.S., where a target-driven culture of customer mistreatment finally collapsed, and cross-selling performance that seemed to be too good to be true revealed itself to be just that.
Singling out this organization is, however, unfair. There is a seemingly never-ending series of corporate scandals that have caused people to doubt the words and intentions of those in charge. Think Volkswagen and its emissions scandal, still unfolding with a multi-billion dollar price tag. Take Deutsche Bank’s US$7.2 billion settlement for selling toxic mortgage securities in the U.S. In the U.K., some former Tesco directors were charged with fraud over false reporting because of the way they went about recording various deals with suppliers. Major corporations like Apple, Amazon and Google make the headlines for operating in ways that minimize their corporation tax liabilities in markets where they are clearly hugely profitable by setting up an intricate network of subsidiaries in countries with more favorable tax regimes. Then there are the recent bribery allegations and settlements involving firms such as Rolls Royce. And so it goes on. Consumers, regulators and other stakeholders are drawing the only logical conclusion they can: These organizations, and those who lead them, are in it for themselves and are not to be trusted.