The majority (62%) of educated, affluent news and public-policy followers in 20 countries place less trust in corporations now than they did a year ago, though trust levels are higher in developing countries than in the US, where they are lowest, according to the latest Edelman Trust Barometer survey.
The research, which gathers responses from a demographic sample that PR firm Edelman calls “informed publics”* between ages 25 and 64, explores this group’s levels of trust in four institutions: Business, government, media and NGOs . Results reveal the lowest across-the-board levels of trust since the survey began ten years ago.
Trust in Business, CEOs Plunges
When respondents in the US were asked about trust in business in general, only 38% said they have faith in business to do what is right, a 20% plunge since last year. Moreover, only 17% said they trust information from a company’s CEO. Both are lower levels of trust than those Edelman measured in the wakes of Enron, the dot-com bust, and Sept.11, 2001.
This decline in trust also is playing out on in people’s everyday lives, Edelman found. More than three-fourths (77%) of survey respondents say they refuse to buy products or services from a company they distrust, and 72% say they have badmouthed a distrusted company to a friend or colleague.
By a three-to-one margin, respondents around the world say that government should intervene to regulate industry or nationalize companies to restore public trust. In the major Western European economies of the UK, France, and Germany, three-quarters say that government should step in to prevent future financial crises (73%, 75%, and 74%, respectively).
In the US, less than half (49%) say the free market should be allowed to function independently. Globally, the call for government intervention also extends to issues such as energy costs, global warming, and access to affordable healthcare. Respondents around the world, by at least a two-to-one margin, say government has the primary responsibility for solving these issues, though tywo-thirds (66%) expect business to partner with governments and advocacy groups to solve these issues.
Trust Increases in BRIC Economies
In contrast to the lack of trust in the Western economies, trust in business in several emerging economies increased. In China, the “trust in business” score rose from 54% to 71% among 35-to-64-year-olds. In Brazil, trust in business climbed to 69% from 61% a year ago. And while trust in banking dropped by 33 percentage points in the US, trust in banks rose from 72% to 84% in China, and from 52% to 59% in Brazil.
“People in emerging economies credit business with improved standards of living, which remain at historically high levels,” said Richard Edelman, president and CEO of Edelman. “But this trust gain for business may now be at risk, as 79% of Japanese, 56% of Chinese, and 49% of Indian opinion leaders say they have growing concerns about business, and Korea, Mexico, and Brazil report new low levels of trust in CEOs as spokespeople.”
According to the survey, respondents say being able to “trust a company” is one of the most important factors in determining a company’s reputation. Among a global audience of 25-to-64-year-olds, trust ranks just below the quality of a company’s products and its treatment of employees – more important than a company’s financial future, job creation, giving back to the community, and innovation in products and services. Transparency, defined as frequent and honest communication, also outranks those attributes.
Repetition Key to Belief
The survey also found that 60% of respondents say they need to hear information about a company three to five times before they believe it:
Further, independent specialists remain the most trusted purveyors of information about a company, with 62% globally saying an academic or expert on a company’s industry or issues would be extremely or very credible. Employees and peers are also considered credible sources of information about a company, with 47% trusting what they hear from “a person like yourself” and 40% trusting conversations they have with employees.
Additional survey findings:
- Trust in nearly every type of news outlet and spokesperson is down from last year. Trust in business magazines and stock or industry analyst reports – last year’s leaders – decreased from 57% to 44% and from 56% to 47%, respectively.
- Globally, only 29% of respondents trust information about a company from a CEO – down from 36% last year.
- Only 13% trust corporate or product advertising – down from last year’s low of 20%.
- In the UK, France, and Germany, trust in business was already at a low level of 36% among 35-64-year-olds, and it stayed there this year. The only EU countries where business made a notable gain in trust were the Netherlands and Sweden.
“It has been a catastrophic year for business, well beyond the evident destruction in shareholder value and need for emergency government funding,” said Edelman. “Our survey confirms that it’s going to be harder to rebuild our economies because no institution has captured the trust that business has lost.”
About the survey: The 2009 EdelmanTrust Barometer is the firm’s tenth such survey. It was produced by the PR agency’s research unit StrategyOne and consisted of 30-minute telephone interviews conducted by World One from November 5 – December 14, 2008. The sample consisted of 4,475 informed publics in two age groups (25-34 and 35-64).
*“Informed publics,” as defined by the survey, are those who were contacted by the research firm and met the following criteria: College-educated; household income in the top quartile for their age in their country; read or watch business/news media at least several times a week; and follow public policy issues in the news at least several times a week.