Public Trust in Business: Why It Matters and Where It’s Lacking

Having a good product or service that sells well is one aspect of running a successful business but building and maintaining trust is quite another. This is backed up by numerous studies. For example, in 2016, PwC reported that 55% of CEOs considered a lack of trust a threat to their organisation’s growth. Harvard Business Review research also found that workers in companies with high levels of trust reported 106% greater energy in the office, 76% greater engagement and 50% more productivity than staff at organisations with low levels of trust.

For most companies, instilling faith in both the employee and the customer base takes a massive amount of work that can last years. For organisations operating with a culture of honesty and transparency, however, trust tends to come naturally. So does success.

Earlier this year, Edelman released its Trust Barometer which gauges trust levels across a range of institutions such as government, NGOs, the media, health authorities and business. Now in its 22nd year, the research polled 36,000 respondents across 28 different countries. Focusing on business, Edelman found that trust both declined and gained in 11 out of 27 countries while it remained the same in a single instance (Nigeria was excluded from this question).

Trust is higher in countries that experienced meteoric economic progress over the past two to three decades. Not only that, levels of trust among the public are still rising significantly year-on-year in those markets. China had the highest trust in business out of all countries polled at 84% and it experienced a 14-percentage point gain between 2021 and 2022. Indonesia came second with 81% and it was followed by India and the UAE with 79% and 78%, respectively. Saudi Arabia rounded off the top 5 with 74%.

At the opposite end of the scale, trust in business was lowest in Russia at just 34%, a figure that remains unchanged since the last edition of the barometer. It should not come as too much of a surprise given Russia’s reputation for systematic corruption underpinned by power, wealth and a network of notorious oligarchs. What may be more surprising are the other countries where less than 50% of respondents trusted business – South Korea (43%), Japan (48%), Germany (48%), the United States (49%) and the United Kingdom (49%).

This pattern can be attributed to a vicious cycle of mistrust across many institutions, particularly the government and the media. Business has been expected to take the lead on a range of societal problems and it has fallen short addressing issues such as climate change, economic inequality and workforce reskilling. It is also necessary for businesses to work with other institutions to tackle societal issues but there has been a lack of collective effort towards fostering innovation and making an impact.

The public are also increasingly advocating for brands based on their beliefs and values. This has also had an influence on where people are choosing to work and how they invest their money. Despite the global trust disparity, business remains the most trusted institution in the Trust Barometer at 61%, ahead of NGOs at 59%, the government at 52% and the media at 50%.

When workers have a lack of trust in their employer, it can lead to low morale, poor communication, disorganisation, complacency and the loss of sales, along with a whole host of other problems. On the other hand, as can be seen from the Harvard Business Review research, a company fostering a culture of honesty and integrity is likely to have a high level of trust whereby employees thrive in an honest environment of mutual respect. If an employee feels proud of the organisation, he/she is more likely to go above and beyond while staff turnover tends to be far lower.

As in the case of business, Edelman found that trust in employers varies greatly by country. Indonesia had the highest levels of worker trust in employers out of any country at 91%, closely followed by India with 90% and China with 89%. Germany, the United States, the United Kingdom, Australia and Canada all had relatively high trust levels between 70% and 80%.

The lowest level of trust in employers was found in South Korea at just 53%. South Korea has had a military-like corporate culture in place for years and this is now being challenged by a new generation intent on reform. Edelman’s findings represent either a huge opportunity for South Korean employers to re-engage with and manage new expectations or a considerable risk if no action is taken.