Fran O’Sullivan
Collapse of trust opens way for populist politics
Have we reached a point where people trust company employees more than CEOs? According to the 2017 Edelman Global Trust Barometer, it has already happened with the public trusting employees more than CEOs, senior executives, activist consumers, academics or media spokespersons to give them credible and honest information about a company’s earnings and operational performance, top leadership’s accomplishments, handling of crises, innovation, treatment of staff and customers, views on industry issues and programmes to address societal issues.
Blunt, outspoken comments, spontaneity, personal experiences and social media are defining how the public views companies — not the polished, often vanilla statements by CEOs.
Globally (that is, in the 28 countries surveyed) trust in CEOs has reached an all-time low. In New Zealand the credibility rating is just 28 per cent.
Business is on the brink of outright distrust in New Zealand. But companies don’t have that to themselves.
Trust in the media worldwide has plunged to all-time lows with New Zealand media rated poorly compared with that of some other nations; trust in government has also slipped internationally and at home from 2016 to 2017 and even NGOs are seeing a loss of confidence.
What’s driving this is a sense the system has broken and is failing citizens. Not just the public at large but those Edelman defines as “informed”. Those at the top of the pile are also disillusioned. Edelman has a range of suggestions for how business can counter these trends. But the most potent insight is that businesses’ “licence to operate” is at risk.
There is majority support for the view that the pharmaceutical industry needs more regulation; agreement that policymakers should tax foods that negatively affect health; and majority agreement that financial market reforms have not increased economic stability.
Before CEOs, boards and shareholders pack up shop and go to the beach there is one clear positive: agreement that companies can take specific actions to both increase profits and improve the economic and social conditions in the communities where they operate.
This is a major shift from the prevailing ideology of the 1980s and 1990s that business is just there to operate in the shareholders' interests.
The Edelman Trust Barometer suggests the public wants to see companies that treat their employees well, offer quality products and services, listen to customers, pay their fair share of taxes and display ethical business practices.
And on the political front, New Zealand is not likely to escape the wave of discontent that swept Donald Trump to power in the United States and the Brits out of the European Union, judging by the loss of confidence in governments.
Edelman trumpets that “trust is in crisis” worldwide.
Prime Minister Bill English — who next week will make a major speech on trade — will be putting New Zealand’s free-trade feet forward at a time when nearly one in two respondents in the 28 countries agreed with the proposition: “We should not enter into free-trade agreements because they hurt our country's workers”. Trump has been criticised for wanting to put “America's interests first” — but the survey shows 69 per cent of respondents agree that “we need to prioritise the interests of our country over the rest of the world” and 72 per cent agreed the Government should “protect our jobs and local industries even if it means our economy grows more slowly”.
While the survey does not dwell on the coming New Zealand election, the barometer results suggest the level of distrust is so marked that there will be fertile ground for populist electioneering.