Monday, January 27, 2014

The trust conundrum.

South African government one of the least trusted in the world.

Only 17% of informed South Africans taking part in the latest Edelman Global Trust survey, trust the government to do the right thing.

This is the first time that South Africa has been included in the annual global barometer monitored by the world’s largest public relations firm. While opinion surveys have their pitfalls, the long standing Edelman research is viewed as one of the most authoritative and covers 33 thousand respondents in 27 countries. South Africa has made a rather shameful debut in its 2014 survey released this week, showing the lowest informed trust in government of the 27 countries researched.

One is tempted to conclude that this lack of trust by the informed (college educated, high income mature adults) is not shared by the less informed. But this is contradicted by the relatively low general public trust index average of 42%, which covers trust in the four main institutions of government, business, media, and NGO’s, or civic organisations.

This again raises the question why a government with such a low level of trust, still has such overwhelming support at the polls. Blind historic allegiance to the “struggle” and less populist opposition parties are perhaps two of many answers. But in the absence of comparable Edelman data (which shows a global trend of a substantial decline in government trust) the forthcoming April elections could yield some surprising outcomes.

Despite political and media rhetoric (my own included) that has criticised business behaviour over the past number of years, most informed South Africans (63%) still trust business to do what is right. This means that the country has another dubious honour of having the widest gap of the countries surveyed between trust in government and trust in business.

The gap globally is one of the noteworthy features of the survey and is shared by virtually all of the countries involved.


This poses a colossal conundrum for business and society as a whole.

· There are still many (42%) who distrust business.

· Trust in business generally has not improved. Indeed it has been buoyed by an improvement in emerging markets, but an entrenched if not growing scepticism in the developed world.

· While most trust business more than government, there is a continuing demand for more regulation of business, especially in the financial sectors, energy and food.

· More than half (51%) see the primary role of government as being the regulation of business and protecting consumers against exploitation.

· Company leaders are simply not trusted. Only about 20% of the general public trust business leaders to make ethical or moral decisions; tell the truth and help solve societal problems. It is even less (about 15%) for government leaders, pointing to a lack of moral leadership worldwide.

· Adding to this sense of disquiet is the decline in public trust in the media – down from 57% to 52%. American and British media score rather poorly at about 40%, while South Africa media received a rating of 55%.

· As sectors, the media and banks share the lowest rankings in trust, the latter having improved their trust score in the last year or so. The most trusted sector is technology followed by the automotive industry.

· Less than half of the general public trust the financial services industry to do the right thing, with the financial advisory and asset management sector ranking even lower at 46%.

· The most trusted constituent in society remains the NGO or civic organisation sector, followed by business, the media and then government.

Edelman CEO, Richard Edelman believes it will be “a monumental error” for business to see the sharp decline in trust in government as an opportunity to agitate for greater deregulation. They should rather build on their higher trust position to engage societal concerns.

“Our research indicates a reputation hangover for business from the Great Recession of 2008. Events of the past 12 months ...have renewed concerns about business’ ability to self-regulate”, he says.

The latest Trust Barometer again reminds business of the need to move away from old paradigms and assumptions about itself. It’s a subject that has occupied most of my writings in “The Human Touch” on Moneyweb. The narrow “profit above all else” mantra and short-term shareholder value criteria that have dehumanised business over the last few decades will impede the evolvement of business and a return to its rightful place as a force for good and making a meaningful difference to our lives.

Edelman Executive Ben Boyd has perhaps summed it up best: “Today’s world requires a shift from the historic, transactional nature of capitalism to a model of value creation that encompasses societal benefit as well as shareholder value. This year’s data outlines not only an opportunity, but more importantly, a responsibility for business to redeļ¬ne and reprioritize the way it thinks about value. To this end, value is no longer the sole domain of the finance function.”

Sound familiar?

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