Trust in business rising despite banking sector’s woes

meeting_02.jpg

Global trust in business is improving, according to Edelman's annual Trust Barometer survey, despite wide expectations that banks will revert to 'business as usual' after the recession.  

The rebound is fuelled by "a spike in a handful of Western countries" and especially the United States, where it grew 18 percentage points last year to hit 54%, according to the 2010 edition of Edelman's annual Trust Barometer, presented in Brussels on 30 March.

In Europe, the biggest jumps of trust in business were recorded in Italy (26 points), the Netherlands (15 points) and Spain (14 points). 

Nevertheless, trust in banks remains at rock bottom, with huge declines seen in most Western countries between 2007 and 2010. The most dramatic falls were recorded in the US (69 to 29%) and the UK (41 to 21%).

Indeed, 70% of respondents worldwide expect business and financial companies "to revert to 'business as usual' after the recession".

As for the EU, large majorities in Germany (78%), France (74%) and the UK (67%) believe companies will continue to behave as before once the crisis is over.

"Trust in business has improved, but the patient has a long road to go for a full recovery," said Edelman President and CEO Richard Edelman.

Warning that "the increase in trust in business belies its fragility," the PR chief said "there is concern that short-term actions have been taken only as a result of the crisis and that government will need to remain a watchdog".

"Companies will have to prove the sceptics wrong and show they can achieve both profit and purpose," Edelman added.

Indeed, the survey reveals that trust and transparency are now of equal importance to corporate reputation as the quality of the products and services provided by companies.

NGOs, meanwhile, fared well in the report, and were identified as the most trusted type of organisation in eight countries including the USA, the UK, Germany and France.

As for individual industrial sectors, technology emerged as the most trusted (79% trust technology firms "to do what is right"), while insurance firms, banks and media companies were the three least-trusted sectors.

"With the dispersion of traditional media's authority and the rise of opinion journalism, trust in the institution as a whole has waned," the researchers concluded. 

Presenting the survey results, Edelman President and CEO Richard Edelman said "we're seeing a vastly different set of factors driving reputation than we did ten years ago. 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," Edelman continued, adding: "Stakeholders are beyond placing blame. They are looking for leaders who will deliver performance, communicate frequently and honestly, and consider the role of business in society."

Responding to the news that technology is the most trusted industry sector, Neal Flieger, chairman of research firm StrategyOne, said "technology continues to widen its lead over all other industries".

"This is an industry that is viewed as focused on the future, with competitively-priced products that improve the quality of people's lives. Banks are overwhelmingly perceived as being guilty of the reverse, with issues on fees, compensation and credit availability," Flieger said. 

Reflecting on the report's revelation that the credibility of mainstream media like TV, radio and newspapers is falling, David Brain, president and CEO of Edelman Europe, Middle East and Africa, said "companies need to speak and listen to a different and often wider range of stakeholders than in the past, and if necessary, be ready to change course based on what they hear".

"More than ever, engagement needs to be tied to action and not just set to broadcast. This means cultivating a wide circle of spokespeople with substantial expertise, participating in conversation in real time, and being open to partnering with NGOs for the common good," Brain added.

Commenting on the findings of another survey presented last month, Daniel Hamilton, European analyst at ComRes, told EURACTIV that "there is a great degree of optimism among the European public affairs sector about its prospects for the next twelve months".

Nevertheless, he was quick to warn that "while the figures do point at growth in the European public affairs sector, it would be wrong to draw any broader conclusions about the overall prospects for the European economy in 2010". 

Global public relations firm Edelman presented its 10th annual Trust Barometer in Brussels on 30 March.

Almost 5,000 members of the public in 22 countries were surveyed for the study, carried out in conjunction with research company StrategyOne.

Survey participants came from two age groups (25-34 and 35-64) and were college-educated, had household incomes in the top quartile for their age in their country, read or watched business news media several times a week and followed public policy issues several times a week. 

A separate survey, compiled by polling and research consultancy ComRes and presented last month, found public affairs professionals were optimistic that the worst of the recession is over, with the majority feeling that the recovery in Europe had already begun (EURACTIV 15/03/10).

  • 27 May: SEAP workshop on 'Beyond interest representation registration: Trends in EU transparency'.  

Subscribe to our newsletters

Subscribe