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04 May 2021
by Maggie Williams

REBA’s Inside Track: Trust is fragile – break it at your peril

According to Edelman’s Trust Barometer 2021, CEOs are now more trusted than government in 18 of the 27 countries that it polls. 

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The barometer, which is celebrating its 21st year in 2021, is a measure of public trust in governments, businesses, media and non-government organisations. Its current report (based on October 2020 data) makes sobering reading for anyone involved in assessing how countries and companies are run.

For the first time in the report’s history, only businesses are perceived as both ethical and competent. Governments are seen as particularly poor in terms of competence, as populations around the world questioned their handling of the pandemic, amid other factors such as how the dog days of the Trump administration in the US played out.

But trust is fragile and transient. Roll back to the 2020 report, and businesses were considered significantly less ethical, with inequality, greed and insecure employment undermining individuals’ trust in their employers and business more generally.

The pandemic has tested business leadership, authenticity and agility more than any time in living memory. It has also set new standards in what we expect from our leaders. CEOs who are silent on issues such as leading a more human business and recognising their company’s effect on wider society are not just seen as absent from the fray: they are now putting their organisation at risk of reputational damage.

Inauthentic company cultures that look very different on the inside from that portrayed externally are another failure of trust.  With the power of social media at their fingertips, employees now have a voice that is increasingly willing to call out mismatches between reality and rhetoric.

That authenticity is also required across the whole organisation. Genuine messages from CEOs that are supportive about positive values will be quickly undermined by poor quality line managers who are unable to change their own leadership style, or by unfair pay policies.

Most employers will have had to act with agility over the last 12 months, whether to save their business outright, or to shift to new approaches such as remote or hybrid working. To retain trust, that agility will need to continue. Despite a year of on-off home working, most businesses will still have little idea of how hybrid working looks for the long-term. How can different  types of working pattern be meshed together and managed? How will employers create equality of opportunity and reward across different working patterns? What are the long-term implications for employee wellbeing?  

Many of the factors that were undermining trust in pre-pandemic business in 2020, such as inequality and fears over the future of work, haven’t gone away. Gig working and insecure employment contracts are still a worry for many – and with very little data to show what the long-term effects of this model are for both individuals and businesses.

The to-do list for reward and benefits directors to help entrench and build trust is long: fair and transparent pay, reward that supports positive culture and leadership values, an employee wellbeing strategy that works for everyone, and a credible approach to executive remuneration that looks to purpose and beyond profit alone all have a crucial role to play in building and retaining trust.

While we are still in the early stages of recovering from the pandemic, businesses, governments and individuals alike may feel some sense of stability is on the horizon.  Simply returning to ‘business as usual’ where employers are perceived as unethical and untrustworthy will make rebuilding from the shocks of the last 14 months far harder. Trust will remain fragile – but without it, so will profitability. 

The author is Maggie Williams, content editor at REBA.