Fewer than 20 percent of consumers believe business leaders tell the truth when confronted with difficult issues, and they are twice as likely to trust academics, technical experts or even their peers, according to the 2013 Edelman Trust Barometer.
This may come as no surprise following several high-profile scandals in 2012 involving CEOs and government officials, including former McKinsey managing partner Rajat Gupta, Chinese government official Bo Xilai and Lance Armstrong, former chairman of the Livestrong Foundation.
Edelman surveyed 26,000 people across 26 markets. The results showed the public’s trust in leaders to be far below that of institutions globally. Faith in businesses to do what is right rests at 50 percent while belief in business leaders telling the truth is a mere 18 percent — a 32 point gap. The trust gap between business and business leaders is amongst the largest in the U.S. and China, at 35 points.
“We’re clearly experiencing a crisis in leadership,” said Richard Edelman, president and CEO, of Edelman. “Business and governmental leaders must change their management approach and become more inclusive by seeking the input of employees, consumers, activists and experts such as academics, and adapting to their feedback. They must also pass the test of radical transparency.”
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While trust in business is seen to be waning, faith in academics, technical experts and everyday peers is rising, a reflection of the democratizing trend of recent years.
A new documentary called The Naked Brand also makes the claim that the public’s faith in business in particular is making traditional forms of advertising ineffective. As more online retailers such as Amazon allow consumers to read peer reviews of products before making purchases, businesses are forced to become more open and to work to make themselves better brands. The documentary claims typical consumers are more likely to believe peer product reviews than traditional marketing, conforming to Edelman’s results.
“Innovative products and making money are now table stakes,” said Ben Boyd, global practice chair, Corporate at Edelman. “Business must show that it has a broader skill set and can execute on engagement and integrity-based attributes. Now is the time for business to go beyond simply earning the license to operate toward earning a license to lead, serving the needs of both shareholders and broader stakeholders by being profitable and a positive force in society.”