Home » Global Business » Trust in Business on the Rise

Trust in Business on the Rise

U.S. businesses report increased levels of public trust

After witnessing a considerable decline in its trust ratings, U.S. businesses are apparently performing better on the trust parameters now. Thanks to the ability of the companies to repay their bailout money, American businesses have recorded an increase in overall trust ratings in comparison to its January 2009 figures.

According to the mid-year assessment of trust by Edelman, an independent global PR firm, even other countries such as France, Germany and India have shown great signs of improvement in trust levels, with India taking the lead followed by China.

Although China recorded a two point drop in its trust ratings, with 60 percentage points, it still is way ahead in comparison to its counterparts in the west. The survey was conducted among 1,675 informed public in six countries – the U.S., the U.K., France, Germany, India, and China.

Edelman’s previous survey, conducted in January, showed a devastating loss in trust in the American private sector mostly owing to the government sponsored bailout programs. However, the current survey demonstrated a substantial increase in trust in business with the U.S and France reporting up 12 percent and 11 points respectively.

In the U.S., 48 percent of informed public trust business to do what is right, up from a low of 36 percent in January. The figure for France rose to 41 percent from 30 percent.

The recently released special midyear trust update sought to gauge whether recent actions taken by business and government in the past six months have impacted trust in those institutions.

Edelman CEO and President, Richard Edelman believes rise in trust levels can be attributed to the tangible actions taken by the corporations. According to survey respondents declining CEO compensation (80 percent), ability of companies to pay back bailout money (81 percent) and firing of underperforming executive teams (78 percent) contributed as important short-term factors in regaining trust.

Additionally, factors such as production of quality products/services, good treatment of employees, having transparent business practices and communicating frequently on the state of the company, also contributed significantly to the increase in trust levels.

At the same time, public trust in government has also risen, particularly in the US and India following recent elections; with India, recording an increase of 13 points to 55 percent followed by the U.S., where the trust barometer rose 12 points to 42 percent.

Interestingly, the younger respondents (25-34 year olds) who were skeptical about the government sponsored bailouts earlier have become significantly more trusting in both business and government. In the US, for example, Edelman says, 58 percent of this group trust business to do what is right, up from 32 percent in January, 2009 and nearly back to the level of 60 percent recorded in January, 2008. “This cohort in the U.S experienced an “Obama effect” since he took office with an increase of 24 percentage points in trust in government,” points out Edelman in his recent article with Huffington Post.

On the industry front, technology sector dominates the scene with a 15 points variance in comparison to other sectors. The second or third ranked industry in Western Europe and the U.S. is either biotechnology or health care, while in China and India, it is banking. Trust in the troubled industries in the West, specifically the auto and financial services, improved over the lows recorded in January, 2009, especially in the U.S and U.K.

Trust  in Business during Jan2009 and Jun2009
CountryJan 2009 %June 2009 %Variance %
France30 4111
UK46 44-2
China62 60-2

Source: Edelman Trust Barometer
*Rankings in the above table are based on the percentage variance in trust levels.

About fayazuddin a. shirazi