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In this year’s Barometer, a three-part Figure 1: Emerging markets dominate as “business trusters;” U.S. drops
picture emerges of trusters, neutrals,
to within 5 points of Russia (Top 10 GDP countries)
and distrusters of business and gov-
ernment (figures 1 and 2). Countries How much do you trust business to do what is right?
hovering in the 50 percent-range, so
called “neutrals,” occupy a middle Trusters Neutral Distrusters
ground as the divide widens between 100
In the early years of the Barometer, Responses 6-9 only on 1-9 scale; 9=highest; Informed publics ages 25 to 64
90
+14 +46
The predominant exception is Ger- 80
88%
85%
many, where trust in business is up
70 74%
by 12 points, but trust in government -6 -10
60
is down by 10 points—to 33 percent,
the lowest of the top 10 economies. 50
51% 49%
In Germany, business is now enjoying 40 43% 45% 43% 44% 43%
46% 43%
42% 40% 38% 39%
the benefit of the Hartz labor reforms, 39% 38%
30 36% 33%
but the government is seeing wide-
20
spread opposition to the country’s
10
bailout of troubled European nations.
0
China Brazil Japan France Italy India U.K. U.S. Russia Germany
Technology, which is in the No. 1 spot Figure 3: Banks’ reputation plummets in West, while tech stays high
for the third straight year, is now
worldwide; automotive climbs across the globe
followed by automotive and telecom-
munications. In the U.S., where GM How much do you trust the following industries to do what is right?
posted the largest IPO in history,
the automotive industry earned back Banks Technology Auto
half of the trust it had lost in 2009. 100 +12 +21 93% 93%
The starkest contrast, however, is 90% 98%
90 87% +7 85%
83% 82% 80%
between technology and banks 78% 77% 78%
80 -46
(figure 3). The dramatic three-year 71%
73%
69%
73%
70 75%
drop in trust in banks in the West
-30
keeps this industry stuck at the bot- 60
+17 53%
49% 48%
tom in global industry rankings. By 50 46%
contrast, in China, where banks are 40
credited with financing increased 32%
30 25%
prosperity, trust surged by 12 points
20 16%
to 90 percent.
10
All four BRIC countries have gained 0
trust as headquarter countries for China India U.S. U.K. China India U.S. U.K. China India U.S. U.K.
global companies (figure 4). The trust 2008 2011 2008 2011 2009 2011
comes mainly from fellow emerging
markets, indicating that the BRIC Responses 6-9 only on 1-9 scale; 9=highest; Informed publics ages 25 to 64
strategy to target emerging econ-
omies is producing results. However,
when compared to Germany and Figure 4: Trust in BRIC-based Figure 5: Trust in NGOs on par with
Canada, longtime leaders in the
companies rises business in emerging markets
most-trusted-headquarter-country
category, the BRICs still have a How much do you trust global How much do you trust business to
ways to go to be considered reliable companies headquartered in the do what is right? How much do you
business hubs. following countries to do what is right? trust NGOs to do what is right?
0 0
Germany Canada Brazil India China Russia Brazil China U.S. U.K./Fr/Ger
3
The United States: The Stark Exception
In a reversal of last year’s Figure 6: In U.S., 2011 decline mirrors 2008-2009 drop; only country
uptick, the U.S. suffers an to see trust fall in all four institutions
across-the-board tumble, with
declines in all four institutions. Trust in institutions: 2008-2011
70
65 63% 63%
The downturn in trust in the U.S. in
2010 echoed the drop that resulted 60
Worldwide
from the worldwide financial crisis. 59% 54%
55 financial crisis 55%
While not as steep a decline, the
50
country lost half the gains it earned 46% 45% 46%
back in 2009 (figure 6). 45 46%
Trust in all credentialed spokes- a company, a 19-point increase In the wake of last year’s crises,
people is higher this year, signaling a over 2009. the Barometer posed a series of
desire for authority and accountability questions about who should speak
—a likely result of the skepticism By contrast, a “person like me” for a company in a challenging
wrought by last year’s string of dropped by four points globally in that time. “Multiple voices” is the first
corporate crises. Since 2009, time, falling from the top three to conclusion drawn, as CEOs, third
academics and experts—long the the bottom two, virtually swapping parties, company chairmen, and
front-runners—earned another eight spots with the CEO. This may be a technical experts all have a role to
points to climb to 70 percent. For result of changing attitudes about play when a company confronts
the first time, the Barometer asked what constitutes “a person like me,” a crisis. In the case of a product
about the credibility of a company’s rather than an indication of a signifi- recall, the technical expert and
technical expert who is, in turn, cant decrease in the actual credibility the CEO are the preferred spokes-
deemed “very” or “extremely credible” of peer-to-peer communication. With people (30 percent and 37 percent,
by a vast majority (64 percent). some estimates indicating that the respectively). In a situation where
average Facebook user does not the local community has been
CEOs are now in the top tier of know one-fifth of the 500 people damaged, more people want to hear
trustworthy spokespeople, a strik- typically listed as friends on his or her from the CEO (38 percent) than
ing shift from two years ago when page, it is reasonable to ask whether they do a third-party representative
they sat second from the bottom the meaning of the word “friend”— (17 percent), government official
(figure 7). Fifty percent say CEOs and by association “a person like (12 percent), or company technical
are credible spokespeople about me”—has become devalued. expert (11 percent).
Figure 7: CEOs lead rise in trust in authority, but “person like me” drops amid flight to credentialed spokespeople
If you heard information about a company from one of these people, how credible would that information be?
2009 2011
5
Surround Sound Needed in Time of Skepticism
A jumbled media landscape and Figure 8: Developed markets more distrustful of media (Top 10 GDP countries)
the domino effect of corporate How much do you trust media to do what is right?
and government crises have
Trusters Neutral Distrusters
increased skepticism in key 100
+17
Western nations. 90 +19
80
80%
70 73%
While trust in media as an institution 60
+12 -11
63%
inched up globally, it declined signifi- 50 54% 58% -9
50% 48% 45% 45%
cantly in the U.S. and the U.K. (figure 40
39% 37% 37% 37% 38%
36% 36% 38%
8). As in 2009, the majority need to 30
31%
27%
hear something between three and 20 22%
five times to believe it (figure 9). But in 10
The data portray a savvy consumer Figure 10: Search engines “go-to” source; online news second
who turns first to search engines
to see what is available on the topic Where do you generally go first for news about a company? Then where do you go?
of interest, and who then seeks
out traditional media to confirm First Source Second Source
or expand on what he or she has
learned. Information ubiquity has Online search engine 29% Online news sources 23%
changed the playbook for corporate Online news sources 19% Print (newspapers/magazines) 17%
communications, the data suggest,
signaling to companies that they Print (newspapers/magazines) 15% Online search engine 16%
cannot simply be present with their Broadcast (radio/TV) 12% Broadcast (radio/TV) 14%
messages, but rather must be
omnipresent through an approach Company website 11% Company website 11%
that encompasses mainstream, new, Friends and family 7% Friends and family 10%
social, and owned media.
Social media 5% Social media 7%
This year’s Barometer explored Figure 11: Quality, transparency, trust, and employee welfare most
whether trust can diminish the impact
important to corporate reputation
bad news has on a company. The
answer is yes (figure 12). Fifty-seven How important are these factors to corporate reputation?
percent will believe negative infor-
mation about a company they do
not trust after hearing it just once
High quality products or services 69%
or twice. When a company is trusted,
however, only 25 percent will believe Transparent and honest business practices 65%
negative news about it after hearing Company I can trust 65%
the news once or twice. The same
Treats employees well 63%
holds true for positive information,
with far fewer believing good news Communicates frequently 55%
about a distrusted company. These
Prices fairly 55%
findings send a strong signal that
corporate leaders would be well Good corporate citizen 51%
advised to create a trust foundation Innovator 46%
so that positive information has an
Widely admired leadership 39%
echo chamber in which to resonate.
Financial returns 39%
The most important corporate repu-
tation factors remain quality products,
transparency, trustworthiness, and Responses 8-9 only on 1-9 scale; 9=highest. Informed publics ages 25 to 64 in 23 countries
employee welfare, while a company’s
financial performance is tied at
the bottom with its having widely
admired leadership (figure 11).
7
The Transformation of Trust
Trust in business may have stabilized Figure 13: Expectations high for business to invest in society
globally, but it is different and condi-
tional, premised on what a company A. Agree: Should corporations create shareholder value in a way that aligns with
does and how it communicates. In society’s interests, even if that means sacrificing shareholder value? B. Agree: Should
this transformation, there are new government regulate corporations’ activities to ensure business behaves responsibly?
expectations for governments, cor- 100
porations, and leaders—as well as a 91% 89% 89% 89%
90 85% 85% 85%
new architecture for earning trust. It 82% 81% 81%
80% 79% 78% 78%
supplants the “fortress framework” in 80 82% 82% 74% 73%
72% 71% 71%
which corporations have customarily 70
70%
74% 73% 67%
63% 62%
69% 67%
protected their brands, controlled 60 62% 61%
66%
63% 61% 63%
58%
information, and given short shrift to 50 56% 57% 55%
53% 53%
partners, aiming to maximize returns 48%
40 50% 44%
solely for shareholders. The new 49% 42%
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Richard Edelman
President and CEO, Edelman WHAT
Focus Solely on Profit Profit with Purpose
On the cover, from top left: newspaper stall in Dublin, Ireland; Wikileaks founder Julian Assange at press
conference; oil-soaked pelican in wake of BP Deepwater Horizon rig explosion; Goldman Sachs chairman
and CEO Lloyd Blankfein testifies before Senate Subcommittee on Investigations; unemployed worker
holds sign at rally; Dilma Rousseff, Brazilian president, receives presidential sash from Lula da Silva;
relatives of Foxconn employees mourn family members following suicides at Chinese manufacturer.