Public confidence in companies, governments and non-governmental organisations has staged a recovery since last year’s “trust Armageddon”, but the rebound is patchy and fragile, according to data to be presented at the World Economic Forum on Wednesday in Davos.
Trust in business has risen from 49 per cent to 53 per cent around the world year-on-year, says the annual “trust barometer” of well-educated, highly paid and engaged “informed publics”, conducted by Edelman, a communications consultancy.
Trust in government, on the rise since the start of the financial crisis, edged up from 44 per cent to 46 per cent globally, leaping from 30 per cent to 43 per cent in the US but falling from 41 per cent to 35 per cent in the UK. Both are well behind the steady 77 per cent figure in China.
The return of confidence in business to pre-crisis levels, confirming a snapshot survey released six months ago, was driven by only a few countries, with a re-bound in the US erasing the “trust discount” US companies had suffered since the Iraq war, said Richard Edelman, chief executive.
Despite strong recoveries in the Netherlands, Italy and Spain and a weaker showing among the Brics and other growth markets, trust in the traditional economic powerhouses of North America and western Europe is still lagging behind Mexico, Indonesia, India, China and Brazil.
Trust has rebounded in almost every industry except banking, which remained at 45 per cent globally, down from 56 per cent in 2007 and 2008. In the US, UK and Germany trust in banks plumbed new depths, as financial institutions began to repay bail-out funds but ran into fresh criticism of bonus policies.
Trust in US banks stands at 29 per cent, down from 36 per cent in the 2009 survey and 69 per cent a year earlier. “US banking was the number three most trusted industry in 2007. Now it’s second lowest after insurance,” Mr Edelman said.
Media companies missed the trust rebound, but even blogs and recommendations from friends on social networks are no longer given the credence they enjoyed. “The more people think there’s a filter between them and information, the less they like it,” said Neal Flieger, chairman of StrategyOne, the Edelman research company which conducted the survey.
The survey of 4,875 people in 22 countries, aged between 25 and 64 and in the top quartile for income, shows continued scepticism about companies’ long-term business practices. Seventy per cent of those polled, between September and November, expected to see a return to business as usual in time.
The Trust Barometer, which has helped set the tone for WEF meetings in recent years, also draws the clearest picture yet of an emerging “stakeholder society”, in which delivering financial returns for shareholders is no longer seen as executives’ sole priority.
Just over half of those polled saw all stakeholders – investors, customers, employees, government and “society at large” – as equally important. As trust in NGOs continued to rise, a clear majority also said they were more likely to trust companies that worked with NGOs to tackle global issues.
The findings reinforced last year’s survey’s support for “private sector diplomacy” in which business takes on responsibilities once seen as the preserve of NGOs and governments, Mr Edelman said. “There is a recognition that business can do. There is still scepticism that government can do.”
Another consolation for companies around the world is that CEOs are more trusted than a year ago, although independent experts such as academics and financial analysts continue to gain weight over other sources such as social media or television news coverage.
“In some countries, transparent business practices are now seen as more important than making good products and services,” Mr Edelman said. “In 2008 trust was a ‘nice to have’. Now corporate reputation is as much based on trust as transparency as the quality of your products.”