Trust, Transparency as important to Corporate Reputation as Quality of Products/Services It’s a Stakeholder, not just a Shareholder world; Trust in Banks at a high of 82% ? drop in trust levels in Media, NGOs
The 2010 Edelman Trust Barometer shows trust and transparency are as important to corporate reputation as the quality of products and services. The survey, now in its 10th year, shows that businesses must view the operating environment as a stakeholder, rather than a shareholder world and that academics or industry analysts are the most credible voices today for information about a company.
Trust in institutions in Asia Pacific is still high compared to that in the West. India is most trusting of business, government is the least trusted, although trust in government as well as CEOs held steady over the past year. But trust in NGOs is trending down in India, mostly among younger informed publics. Trust in media is also declining in contrast to past years where trust in both media and NGOs was high.
This year’s study shows a sharp drop over the past two years in trust in TV news from 61% to 36%, business magazines from 72% to 47%, newspapers from 61% to 40% and friends and peers online from 50% to 40%. Trust in NGOs decreased among ages 25?34 to 38% and increased among ages 35?64 to 55%. Trust in banks is unharmed – it is at a high of 82% in India – although nearly 8 in 10 believe governments will have a lot or some influence over banks and financial institutions in the future. Technology is the most trusted sector in India at 88%, followed by banks, automotive (79%), pharmaceuticals (75%), healthcare (73%), entertainment (70%) and media at a relatively low 58%.
India?headquartered companies most trusted in India
APAC is least trusting of companies headquartered in BRIC countries. India?headquartered companies are trusted by a majority only in India, China?headquartered companies are trusted by a majority only in China and Indonesia. Japan has the lowest trust in companies headquartered in Brazil (15%), Russia (10%) and China (6%). Companies headquartered in Brazil and Russia are trusted by a majority only in China. India at 78%, Mexico at 63% and the UAE at 52% are the most trusting of India?headquartered companies, with Spain (26%), Germany (22%) and Poland (14%) the least trusting. The 2010 Edelman Trust Barometer survey sampled informed publics in two age groups (25?34 and 35? 64) in 22 countries. All informed publics met the following criteria – college?educated; household income in the top quartile for their age in their country; read or watch business/news media at least several times a week; follow public policy issues in the news at least several times a week. Each year’s survey has revealed new critical issues in the business environment, which Edelman has leveraged to enable clients to engage better with stakeholder groups. “We are seeing a vastly different set of factors driving reputation than we did 10 years ago,” said Richard Edelman, President and CEO, Edelman. “Trust is now an essential line of business to be developed and delivered. CEOs who embrace this new line of business called trust have seen their credibility rise.Stakeholders are also beyond placing blame. They are looking for leaders who will deliver performance, communicate frequently and honestly, and consider the role of business in society.” In Asia Pacific, the findings indicate changing expectations of business and industry post the financial crisis. Most informed publics expect business and financial companies to return to old habits (91% in Indonesia and 82% in India) when the crisis ends. Most also expect government to influence financial institutions in the future – 68% of those interviewed globally, 78% in Asiapac and 77% in India believe government will have more influence over banks and financial institutions post the crisis. Said Alan VanderMolen, President, Edelman Asia?Pacific, “What’s clear to me is that overall we are seeing a levelling out of trust in institutions – that no one institution enjoys unlimited trust or suffers too big a trust deficit. Therefore, there is a big need to pursue strategies of collaboration in order to achieve business and societal goals.”
Partnering with NGOs increases trust
One of the strong findings of the survey is about how corporate reputation is based on transparency and honest business practices as much as quality of products and services, and on how employees are treated. People are also more likely to trust a company that partners with an NGO to battle global issues. Sixty?one per cent of those surveyed in India believe all stakeholders are equally important to a CEO’s business decisions, as against 53% in Asia Pacific. Robert Holdheim, Managing Director, Edelman India, said: “The rise of ‘intangible’ factors, such as transparency as primary trust criteria, signals a major shift. The steady drop of financial performance as a trust factor confirms the shift from a one?way, shareholder?oriented world to one in which companies must target a broader spectrum of stakeholders with targeted, differentiated communications.” Across digital sources, online search engines command the most trust in India at 56%, followed by free content sources at 41%. Social networking sites come third with 27% and blogs a poor fourth at 16%.
About the Trust Barometer Survey
The 2010 Edelman Trust Barometer is the firm’s 10th annual trust and credibility survey. The survey was produced by research firm StrategyOne and consisted of 25?minute telephone interviews using the fielding services of World One from September 29 – December 6, 2009. The 2010 Edelman Trust Barometer survey sampled 4,875 informed publics in two age groups (25?34 and 35?64) in 22 countries. All informed publics met the following criteria: college?educated; household income in the top quartile for their age in their country; read or watch business/news media at least several times a week; follow public policy issues in the news at least several times a week. For more information, visit http://www.edelman.com/trust