Trust in business leadership

It’s a bit of a cliché, nowadays, to say that business leaders have “trust issues”.

Trust in business leaders to tell the truth

Perennially ranked towards the foot of our Global Trustworthiness Monitor, they’re much more trusted than political leaders but trail far behind doctors, scientists and teachers.

Incidentally, this is why corporations tend to use their ‘bench strength’ – technical specialists and subject experts – instead of CEOs, for non-critical, public-facing communication. As we see in our chapter on trust in professions, this is nothing new: the so-called ‘trust deficit’ (that is, insufficient trust to sustain healthy relationships, commercial or otherwise) is a long-term, chronic malady, rather than an acute one.

But dig a little deeper and we find a more nuanced picture. Take what is perhaps the most damning headline – that just 3 in 10 of the global public trust business leaders to tell the truth. That’s far from ideal – but the proportion who actively mistrust, at 37%, is only a little higher. The remainder are noncommittal. Many of these ‘undecideds’ will feel that they don’t know enough to commit – not everyone reads the business pages – or perhaps they think it depends on the leader, or the business, or the context.

There’s an opportunity here for business leaders who have a positive, authentic story to tell. Leaders can’t communicate their way out of situations that their bad behaviour got them into, but they can certainly marshal public support around the good things they’re doing, and how they contribute to wider society. This is why messages about corporate purpose and vision are often highly personalised around a figurehead CEO.

A second important point is that trust in business leaders varies a great deal, across the globe. In countries like France, Belgium, Canada and Great Britain the proportion who trust them to tell the truth languishes at around 1 in 5. But in India it’s above 3 in 5 – and in Japan and China it’s about half, with relatively few actively mistrustful.

The same picture emerges when we ask people whether business leaders generally behave ethically, and whether they are a force for good in the world. The answers, typically, will be much more positive in India, China, Saudi Arabia or Japan, where businesses are more likely to be seen as engines of dynamism and progress, than in many of the more sceptical European or North American nations.

Are business leaders over-paid?

Again, while a majority of the global public (6 in 10) say so, this peaks at 7 in 10 in Britain and Australia but dips to 4 in 10 in Japan.

It’s also interesting that younger generations (Millennials and GenZ) are more likely than their older (Baby Boomer and GenX) counterparts to believe that business leaders tell the truth, act in an ethical way and are a force for good in the world. Perhaps this is a product of these cohorts beginning to take up the leadership reins, at the same time as businesses become more vocally purpose-driven and engaged with ESG issues.

Business leaders and their responsibility to speak out on social and political issues

Do leaders have a responsibility to speak out on social and political issues affecting their country? We see greater consistency between the generations on that question. Globally, half express this view – rising to more than two-thirds in South Africa and India – and in each country there is a plurality in support. So, even where trust is low, business leaders seem to have a licence – or even a duty – to take a stand on the issues that really matter to their compatriots.

In recent times, the old advice to ‘keep your head below the parapet’ has often been thrown out, as CEOs have become more vocal on such diverse issues as Black Lives Matter, the cost of living crisis, the war in Ukraine and the Qatar World Cup – even encroaching on hot-button, politicised topics like Roe vs Wade in the US. (Again, the point isn’t that this is new – Lever Brothers at Port Sunlight and Cadbury at Bournville were pioneers of social activism in Victorian Britain. What does seem new – and our work across various industries and countries bears this out – is the scale and range of this engagement).

This corporate activism carries risks. Many of these social, cultural and identity issues are highly polarising, especially for corporations which have a presence in multiple countries.

Speaking out may alienate stakeholders who don’t share your worldview, as well as making you vulnerable to charges of hypocrisy if your own business doesn’t ‘walk the talk’. As a Chief Communications Officer and member of the Ipsos Reputation Council notes, “it is an incredibly polarised environment that we operate in. You have to be very, very open about where you will draw the line and where as a corporate you want to take a stand. You have to be consistent; if you are going to cross that line, you can’t row it back.”

Nevertheless, it seems the genie is out of the bottle – more and more business leaders are finding their voices on the global stage, and on the whole the public are pretty relaxed about it.

Why is this? Clearly, global media – and social media – make it much easier nowadays for business leaders to speak to a wider audience, and to show that their values are aligned with those of their customers, employees and other stakeholders.

Is the role of business in society changing?

At the same time, some commentators wonder whether the role of business in society is fundamentally changing – particularly in Western liberal democracies, many of which have faced growing challenges around polarisation, legitimacy and capacity in recent years.

To illustrate, 3 in 5 members of the Ipsos Global Reputation Council agree with the proposition that business leaders are overtaking politicians as a force for progressive change in the world. One says “there’s been an abdication of government leadership in certain areas and people look to companies to fill the void.” In this year’s Trustworthiness Monitor, we see 2 in 5 (42%) of the global public agreeing, and just 1 in 5 (19%) disagreeing. To pick three examples, in the USA 36% agree that business leaders are overtaking politicians as a force for progressive change (versus 18% who disagree), in Germany 42% (22% disagree) and in South Africa 53% (15% disagree).

This remains a controversial view, and critics worry about corporate overreach or hollow ‘woke-washing’. Indeed, nearly half (46%) of the global public agree that it is still the job of government, not business, to fix society’s problems, with just 1 in 5 (19%) disagreeing.

What’s not in doubt, though, is that as businesses become more purpose-driven, employees more assertive and leaders more vocal, the trust landscape is shifting.

Finally, it’s worth reminding ourselves why this matters – why trust isn’t just a fluffy ‘nice-to-have’ but the key that unlocks tangible business benefits. Our data shows that trust builds resilience: among people who trust a company a great deal, 6 in 10 would definitely give that company the benefit of the doubt in a crisis. Among those who are neutral, that shrinks to just 1 in 10.

We also know that people who really trust a company are more likely to purchase its products, pay a premium and find its communications believable.

So, without trust, no business can hope to thrive. Dig beneath the headlines and we see that the state of trust is nuanced, contextual and evolving.