The Business Roundtable Institute for Corporate Ethics and the Arthur W. Page Society recently launched the Project on Public Trust in Business (the Project) with the publication of a new report, The Dynamics of Public Trust in Business—Emerging Opportunities for Leaders.
The report comes at a critical time that highlights the importance of this topic. As we say in the report, “the current global economic downturn is, at its core, a crisis of trust.” The point is that excessive distrust is a barrier to trade and commerce, and when it becomes systemic, the activities that drive our economies grind to a halt. It is as if all traffic signals suddenly turned to yellow signalling “caution”—freezing flow at the intersections of commerce.
As the crisis makes abundantly clear, the general distrust of business hurts all companies and can their ability to execute solid business strategies. When distrust becomes widespread, the result is the large-scale destruction of value for both business and society that we have seen over the last several months.
The economic crisis, however, has created a moment, a unique moment to beging a vigorous exploration of the relatively uncharted territory of public trust in business. This is particularly important in light of the social and technological changes that have combined to heighten both opportunities and threats while shortening the window in which companies and industries can undertake effective action.
We are happy to see a number of other organizations and publications addressing this issue—many voices may help build momentum athat leads to effective change. For us, the report is a critical first step in a long-term project aimed at making a real impact.
The report is based on both panel discussions which included leading executives and academics as representatives from a broad range of stakeholder groups and on leading academic research. It provides a new framework for understanding how public trust operates, outlining three core dynamics of trust. It demonstrates how understanding the importance of three core dynamics in relationships between business and stakeholder groups—shared values or interests, shared risks and opportunities, and safeguards that limit vulnerability—points the way to solutions. Companies that can determine how to align their core business objectives with the public interest can earn trust.
In light of these dynamics the report recommends that business leaders:
- Create a set of values that define and clarify what your enterprise and its people are at root, and work to ensure that these values are adhered to consistently across your enterprise.
- Build and manage strong relationships based on mutual trust with mediating institutions.
- Embrace transparency.
- Work within your business sector to build trust in the sector.
- Re-invest in the trustworthiness of your firm by making a commitment to enhance the core contribution that the firm makes to society.
While the report makes substantial progress, it is the beginning, not the end, of a major effort in the area of public trust. The Project on Public Trust in Business will carry forward the work that the report initiates, providing an opportunity for business and academic leaders to work together on building and sustaining trust, and make a commitment that can change reality.
The complete report is online at http://www.corporate-ethics.org/pdf/public_trust_in_business.pdf and the news release is online at http://www.corporate-ethics.org/news/20090610.htm.