2010 Trust Barometer: Corporate Social Responsibility More Important Now Than Ever
Two weeks ago Edelman announced their 2010 Trust Barometer and revealed encouraging findings: in the aftermath of the recession, public trust in business is beginning to recover around the world. But the study - the tenth in an annual series that surveys thousands of people on five continents - also had significant findings relevant to corporate social responsibility (CSR). Here we summarize four major issues revealed by the report, of which anybody interested or involved in CSR should take note.
Trust Recovery is Temporary; Long-Term Solutions Needed
Findings: The informed global public has a significantly higher belief that businesses will "do what is right". In the United States trust in business increased 18% from last year. But despite this increase, 70% suspect that business and financial companies will "revert to old habits". Further, the key drivers of trust this year are simply related to the end of the financial crisis: businesses punishing irresponsible employees, paying back their debts, and reducing executive compensation.
Implications: The current trust recovery is temporary and has come on the back of temporary measures. If companies are to maintain stakeholder trust in the months and years ahead, they will need
long term strategies to do so. Companies must demonstrate to the public at large that there is no more "business as usual". Even those completed unconnected to the financial crisis must reassure stakeholders that their way of doing business is a responsible and sustainable one.
Trust, Transparency, Citizenship Key to Reputation
Findings: Profits, service, and quality were recently the biggest drivers of corporate reputation. But in the aftermath of the financial crisis, everything has changed. Now, transparent and honest business practices, trustworthiness, frequent communication and corporate citizenship have entered the top spots. Financial returns are now the least important factor used to evaluate a company's reputation.
Implications: While quality, service, and financial stability are still important, business owners must recognize the growing importance of a clear commitment to responsible business practices. With transparency, responsibility, and citizenship on the mind of most investors, consumers, and employees, only companies that successfully address these issues will be able to maintain their reputations and relationships with the public.
All Stakeholders Important, Not Just Shareholders
Findings: Around the world, a majority of people agree that when a CEO makes an important business decision, the interests of all stakeholders - investors, customers, society, employees, and government - are equally important. This contrasts with the typical notion that primarily shareholders should guide the company's direction.
Implications: The public now expects that business leaders will weigh the interests of all stakeholders when making decisions. The age of the investor-led company is over. Only companies that properly integrate the needs of all stakeholders will be able to thrive in this decade. Thus, stakeholder engagement will be a major challenge faced by businesses of all shapes and sizes, and it is one that most organizations are still unprepared to face.
Corporate-NGO Partnerships Build Trust
Findings: A vast majority of people are significantly more likely to trust companies that partner with non-governmental organizations for a social or environmental purpose. Companies working with NGOs on issues like poverty, disease, human rights, and climate change will much more quickly build trust and a favourable reputation.
Implications: Companies already engaging in social responsibility efforts would be well advised to augment their current efforts by teaming up with a like-minded non-profit/charitable organization. Companies just getting started could use such a partnership as a launchpad for their corporate responsibility strategy. These partnerships contribute to the company's trustworthiness and will also improve the quality of their CSR efforts.
See the 2010 Edelman Trust Barometer for more information.
Don't forget to sign up for our complimentary webinar, The Basics of CSR: Starting Your Stakeholder Conversation Right, being held Thursday, April 29th at 3:00pm EST.