It's one of the great truisms of our time: Trust is critical to business success. Business leaders regularly pay homage to the need to earn and retain it. And no less a luminary in business than Warren Buffett has observed that trust is "like the air we breathe. When it's present, nobody really notices. But when it's absent, everybody notices."
So, trust matters; this much we knew. But what does it actually mean to trust a corporation, particularly when we think about business in its role as a member of society, and not just as a supplier of goods and services?
Trust is a slippery concept and hard to define, but underlying it seems to be the notion of putting your faith in a company despite not knowing all the facts: giving them the benefit of the doubt. And the irony is that, despite an increasingly information-saturated world, there seems to be more doubt around than ever.
GlobeScan works with global businesses on corporate reputation across many sectors, and trust appears to be increasing in value to our clients' businesses at the same time as it is becoming more elusive. Trust -- or the absence of it -- is having an ever-greater impact on the things that businesses care about such as such as brand equity, customer loyalty and market share, propensity for collaboration opportunities and the attraction and retention of talent. Time and again, when we look into what drives the success of our clients' businesses, trust is at the heart of it.
And yet the corporate world as a whole continues to suffer from a chronic trust deficit. For over a decade now, GlobeScan has been tracking the trust that the public around the world has in different institutions to "act in the best interest of wider society."
As the chart below shows, despite some steady improvement in the way people feel about global companies, the gulf in trust between business and nonprofit entities like NGOs remains considerable.
Why might that be? A great deal comes down to the question of motivation. Many -- even most -- people fundamentally do not accept that business exists to work for the general good of society. They believe that a profit-making enterprise will always prioritize the interests of its directors and shareholders over the common good. And with the public defining NGOs' primary role, broadly, as "helping people," the reason for the gulf in trust starts to become clearer.
But when we look further at what appears to drive trust in business, an interesting story emerges. Our recent research with consumers worldwide suggest there is a big difference in perspective between those in the industrialized world and those in emerging economies, as the chart below illustrates.
People in the global south seem much better able than their northern counterparts to point to examples of tangible contributions that business had made to their communities -- education and health infrastructure, sponsorship initiatives -- not to mention the jobs and higher living standards that businesses are bringing with them as they expand their operations.