The “trust” factor

Is it any surprise that faith in government institutions worldwide is on the rocks? Or that trust in business, particularly CEOs, is waning as well? I’d think that neither finding would shock anyone at this point, considering the utter economic and political mess we’ve been wading through over the last three years – particularly as, in many respects, the mess isn’t going to be cleaned up any time soon.

Leafing through the 2012 Edelman Trust Barometer – the global public relations firm's 12th annual trust and credibility survey – you’ll find that blame for the financial and political chaos of 2011 is being placed squarely on the doorstep of government, with trust in government falling a record nine points to 43% globally.

Edelman’s survey – produced by its research subsidiary Strategy One and consisting of 20-minute online interviews conducted from October 10 through November 30 last year – polled 25,000 general population respondents with an "over-sample" of 5,600 "informed publics" in two age groups (25-34 and 35-64) across 25 countries. Here are some of their findings:

• In 17 of the 25 countries surveyed by Edelman, government is now trusted by less than half to do what is right.

• In 12 nations, government now trails business, media, and non-governmental organizations (NGOs) as the least trusted institution.

• France, Spain, Brazil, China, Russia, and Japan, as well as six other countries, saw government trust drop by more than ten points.

• Government officials are now the least credible spokespeople, with only 29% considering them credible.

• Nearly half of the general population – the first time Edelman’s Barometer survey examined this broader group – say they do not trust government leaders to tell the truth.

Although business experienced fewer and generally less severe declines in trust, it has its own hurdles to clear, Edelman’s survey found:

• Trust in business fell globally from 56% to 53%, with countries like France and Germany, in the heart of the Eurozone economic crisis, experiencing double-digit decreases.

• Lack of confidence in business spread to South Korea, where trust dropped 15 points.

• China was the only country to see a significant increase in trust in business, rising from 61% to 71%.

• CEO credibility declined 12 points to 38%, its biggest drop in nine years. In South Korea and Japan, it dropped by 34 and 43 points, respectively.

• Once again, banks and financial services declined in trust, and were the two least trusted sectors with France, Spain, Brazil, Japan, and South Korea recording the most severe drops.

• Technology remained the most trusted business sector globally.

Although business is substantially more trusted than government, 49% of global respondents believe government does not regulate business enough, and Edelman’s survey also found nearly one-third want government to protect them from irresponsible business practices and one-quarter want regulation that will ensure responsible corporate behavior.

Interestingly, the factors responsible for shaping current trust levels are less important than those that will build future trust, noted Richard Edelman (seen at right), president and CEO of the PR firm that bears his name.

Consistent financial returns, innovative products and highly regarded senior leadership are the primary factors on which current trust levels lie, he said – however, listening to customer feedback and putting customers ahead of profits are far more vital to building future trust.

“Our analysis shows that the operational factors driving present trust in business aren't enough to expand trust in the future,” added Neal Flieger, chairman of Strategy One. “The path forward requires more of a focus on societal and employee-facing issues.”

“The interventions people are asking government to take are changes business can step up and implement on its own,” Edelman added. “Business is now better placed than government to lead the way out of the trust crisis. But the balance must change so that business is seen both as a force for good and an engine for profit.”

Here are some other interesting findings gleaned from Edelman’s annual poll:

• Media, the one institution to see an increase, saw its global trust level rise above 50%. It experienced significant regional upticks in India (20 points), the U.S. (18 points), the U.K. (15 points) and Italy (12 points).

• Traditional media and online search engines are the most trusted sources of information for people searching for general news and information, new product information, news on an environmental crisis, and company announcements.

• Traditional media, TV, newspapers, and magazines are still the most trusted sources of information, according to the Barometer.

• Among 18-29 year olds, digital media is the most popular source for general news and information.

• Social-networking, micro-blogging, and content-sharing sites witnessed the most dramatic percentage increase as trusted sources of information about a company, rising by 88%, 86%, and 75%, respectively

• With the exception of technology and automotive, South Korea experienced extraordinary drops in trust in every industry sector. Telecommunications, down 32 points to 39%, and financial services, down 25 points to 39%, endured the largest drops in trust.

• Brazil saw the greatest drops in trust across all major institutions - government (53 points), NGOs (down 31 points), business (18 points), and media (12 points).

• In Japan, site of last March's earthquake and subsequent nuclear disaster, trust fell severely in three of the four institutions including government (down 26 points), media (12 points), and NGOs (21 points). That loss of trust extended to five industry sectors, including energy (down 46 points), media (21 points), banks (20 points) and financial services (17 points).