Each year, Edelman publishes the Edelman Trust Barometer, the firm’s annual trust and credibility survey, which is currently in its 18th year. The barometer measures the public’s trust in all four institutional groups – government, media, business and NGOs. Research is conducted by Edelman Intelligence, a global insight and analytics consultancy via a 30-minute online survey across 28 countries, drawing on 18 years of data, 33,000+ respondents.
The 2018 Trust Barometer findings were recently released, including dedicated findings for Australia. Edelman Australia CEO, Steven Spurr, shares some thoughts and insights on this year’s results, implications and opportunities with our Conscious Capitalism community.
What are the most significant takeaways from this year’s Trust Barometer results that business leaders should pay heed to? Why, and what do they mean for business?
The 2018 Edelman Trust Barometer revealed Australians’ trust in institutions is continuing to fall, with across-the-board declines for the second consecutive year. Trust in business fell another 3 points to now sit at just 45 per cent, significantly below the global average of 52 per cent. Nonetheless, business is significantly more trusted than government or media, although remains slightly less trusted than NGOs.
We also witnessed the continuation of a transferral of trust from institutions to individual experts. Despite the falls in institutional trust, the credibility of CEOs and boards of directors recorded double digit increases of 13 and 10 percentage points respectively.
The resurgence in credibility of CEOs, directors and experts is stark, however Australians are not just looking for these leaders to communicate and represent their organisation’s interests, but to advocate for, and lead on, broader societal issues.
What do you consider the biggest opportunity for business or business leaders at the moment? And what about biggest risks?
More so than ever before, the public is looking to business leaders to fill the void they believe is being left by the other institutions. The Barometer found 65 per cent of Australians believe CEOs should take the lead on change rather than wait for government to impose it, and 63 per cent believe businesses can simultaneously increase profits and improve social and economic conditions. This creates an important license for business leaders to advocate for policies which benefit both themselves, and their communities.
This is particularly important in an environment where many CEOs are advocating for corporate tax cuts and in some sectors, are threatened with an increasingly restrictive regulatory regime.
However, this advocacy opportunity is not without risk – 49 per cent of Australians say companies that only think about themselves and profit are bound to fail in the long term. If CEOs are to capitalise on their surging credibility, they must factor in the needs and welfare of their communities, consider a wider pool of stakeholders than just shareholders, and explore where shared value can be created.
Have you any recommendations or calls to action for businesses and business leaders based on this year’s Trust Barometer results or general trends you have observed in recent times?
The Barometer revealed Australians’ top mandates for both businesses and CEOs. Australians’ main expectations of businesses are that they protect people’s privacy and data, drive Australia’s economic prosperity, ensure there are plenty of job opportunities available, and ensure Australians have the skills necessary to be globally competitive.
Of CEOs, Australians expect them to ensure their company is trusted, set high ethical standards, and ensure business decisions reflect the values of the company. If CEOs can prove their commitment to trust, ethical behaviour and consistent values, they will be rewarded by their consumers and the broader public.
Any special message for those still doing “business as usual”? As in, those not thinking beyond profit as a bottom line?
The Australian public is rejecting the principle of short-term shareholder primacy, and 49 per cent say companies that only think about themselves and profit are bound to fail in the long term.
Where businesses fail to meet community expectations, regulators will be called upon to intervene, as we are currently witnessing in the financial services sector. It is no coincidence that the Barometer has revealed the financial services sector to be consistently among the least trusted in Australia, surpassed this year by only the beleaguered energy sector.
Distrust also impacts the ability of firms to innovate. For distrusted businesses, innovations are seen as ploys to improve price points or craft another advantage over the consumer, rather than innovative. Trust is fundamental to a business’ licence to operate, and it must now be treated as a critical asset and core business function.
Any special words of encouragement, reinforcement or caution specifically for the CCANZ community?
Australians’ deep distrust in the institutions of government and media has created a widening gap for businesses and businesses leaders to occupy when it comes to advocating for societal interests. The surge in CEO credibility driven by CEO-led initiatives like the marriage equality campaign, Mike Cannon Brookes and Elon Musk’s work on solar energy, and Andrew Forrest’s campaign against modern slavery has demonstrated how powerful advocacy can be in restoring trust.
Conscious Capitalism’s vision of business as the greatest force for good makes long-term commercial sense, and with the other institutions struggling to recover from record-low levels of trust, it may soon be the publics’ expectation.
What are your brightest hopes for the future of business?
I hope that the Australian business community embraces the need to act in the best interests of the broader public, rather than focus on short-term shareholder value. This will require more than just words and policies, but tangible action and transparent auditing of progress.
If businesses recognise the long-term benefits of focusing on creating shared-value, my hope is that business will become Australia’s most trusted institution.
OTHER RESOURCES TO CHECK OUT
- Watch Steven Spurr speak on 2018 Edelman Trust Barometer results for Australia
- The Edelman Trust Barometer
- 2018 Edelman Trust Barometer Results for Australia, “Trust In Tumult”
- Results of the 2018 Edelman Trust Barometer and Executive Summary
- 2018 Edelman Trust Barometer, The State of Trust in Business
- Article on Australian Financial Review, “Trust in CEOs climbs, but trust in business slides further: Edelman Trust Barometer”
- Article on Australian Institute of Company Directors, “Latest Edelman Trust Barometer shows deepening trust crisis in Australia”
- Article on News.com Finance Section, “Australian institutions among the world’s least-trusted, global survey finds”
- Article on Business Insider Australia, “Australians now distrust the government, business and the media”
- Article on Pro Bono Australia, “Australians Losing Trust in Charities”
- Summary on Social Chorus, “The Rise of the Expert: And 6 Other Takeaways from the 2018 Edelman Trust Barometer”
Steve Spurr, CEO, Edelman Australia
Steve joined Edelman in 1998 and became Australia CEO in March 2016. Having over two decades of consultancy and in-house experience on brand and corporate assignments, prior to that he worked in 6 different Edelman offices. Most recently where he was COO of Edelman UK & Ireland, leading the day-to-day operations of over 600 staff across three offices. As Edelman Australia’s CEO, Steve leads an award-winning team of 120 communications and content consultants across Sydney and Melbourne. Steve combines his passions in economics, anthropology and science to deliver strategies to drive trust in today’s low trust world.
Edelman is a leading global communications marketing firm that partners with many of the world’s largest and emerging businesses and organizations, helping them evolve, promote and protect their brands and reputations.
The Edelman TRUST BAROMETER™ is the firm’s annual trust and credibility survey, currently in its 18th year. What began as a survey of 1,300 people in five countries in 2001 has grown into a truly global measurement of trust across the world. The Trust Barometer is produced by our integrated research, analytics and measurement division, Edelman Intelligence.