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Closing the trust gap: Responsible Business Series

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Jill Riseley
Jill Riseley

The Responsible Business series is a program on key responsible business topics to further education, discussion and debate. Closing the trust gap was the first in this series and looked at what business needs to do to improve and drive trust with stakeholders and consumers.

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RESPONSIBLE BUSINESS SERIES CLOSING THE TRUST GAP JILL RISELEY 26 OCTOBER 2018
A QUICK OVERVIEW: What’s TRUST? Noun: firm belief in the reliability, truth, or ability of someone or something. 1. Why trust is the new essential asset for business 2. Trust trends – globally and locally 3. The impacts of trust decline 4. Quick overview of ways of measuring trust 5. 5 things to drive trust in business Followed by: A discussion with Mirvac about its trust journey with Sarah Clarke. Trust is based on competence, benevolence, integrity, transparency, reliability and identification.
TRUST – THE ESSENTIAL BUSINESS ASSET
TRUST AS AN ASSET: INTANGIBLE ASSETS NOW MAKE UP >80% OF AVERAGE COMPANY VALUE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1975 1985 1995 2005 2009 Intangibles Physical and financial Components of S&P 500 market value Source: Ocean Tomo (2010), “Intangible Asset market Value Study” used courtesy of Dowse CSP.
WHY TRUST MATTERS FOR BUSINESS • Research shows Australians are traditionally among the world's most ethically active. • Global RepTrak™ studies found 60% of consumers willingness to buy, recommend, invest in, or work for is driven by perceptions of the company and only 40% driven by the perceptions of the products and services. Who you are is more important than what you sell. • Australians expect companies to go beyond just economic performance. The gap is widening between what consumers expect companies to do in CSR and company performance (or perceived performance) (Globescan). A 2015 study by the World Economic Forum found five general benefits through trust creation: • Better business terms, processes and conditions • Enhanced innovation and entrepreneurship, which contributes to competiveness • More loyal, productive and engaged employee relationships • Stronger external relationships up and down the value chain • Greater resilience to withstand shocks and crises more effectively. Trust contributes to the bottom line.
2016 72
TRUST TRENDS
Closing the trust gap: Responsible Business Series
Closing the trust gap: Responsible Business Series
In 2018, gap in Australia is still 15 points.
2016 Edelman Australia
Closing the trust gap: Responsible Business Series
2017
2017
Closing the trust gap: Responsible Business Series
Closing the trust gap: Responsible Business Series
Closing the trust gap: Responsible Business Series
AUSTRALIA: DECLINE IN TRUST IN ALL INSTITUTIONS: Australians continue to lose trust in business (and other institutions). 2018 Trust Barometer (33,000 respondents across 28 countries) found: • Only 45% of people trust businesses. • 6 in 10 people believe CEOs should take the lead on change ahead of government, more need to stop hiding and stand up for societal causes. • 49% of people think companies only think about themselves. • 66% of people think CEOs are driven by greed. • 56% of people said they have no respect for CEOs who remain silent on important issues.
Closing the trust gap: Responsible Business Series
Closing the trust gap: Responsible Business Series
Closing the trust gap: Responsible Business Series
Closing the trust gap: Responsible Business Series
IMPACTS OF THE TRUST GAP
A watching brief in a changing world…
A LACK OF TRUST DIRECTLY IMPACTS ON YOUR RELATIONSHIPS WITH STAKEHOLDERS….
WAYS TO MEASURE TRUST
WAYS TO MEASURE TRUST: RESEARCHES AND ACADEMICS BELIEVE TRUST IS BASED ON: Competence – Do stakeholders believe you will deliver quality products and services? Reliability – Do stakeholders believe you will consistently do as you say? Integrity – Do stakeholders believe you will do ‘the right thing’? Transparency – Do stakeholders believe you are open and accountable? Benevolence – Do stakeholders believe you care and have their interests at heart? Identification - Have stakeholders heard of you before?
WAYS TO MEASURE: Trust questions can be built into existing research and engagement ie: materiality assessments – or summarized: • Do stakeholders believe you listen to them? • Do stakeholders want to collaborate with you? • Do stakeholders believe you will deliver on what you say you’ll do? OR USE EXTERNAL FIRMS: • Edelman Trust Barometer • External firms can measure stakeholder trust levels: Roy Morgan, Gallup, Nielsen or Anderson Analytics • Institute for Public Relations (US): https://instituteforpr.org/guidelines-for-measuring-trust- in-organizations-2/
5 WAYS TO BUILD TRUST
In Australia, there is significant opportunity to increase trust through meeting the expectations on key drivers. 2016 Australian Results:
#1: BE A RESPONSIBLE BUSINESS! Starting with your own house (top 5 selected by respondents in 2017 Edelman): • Pay tax – don’t move profits offshore to avoid tax. • Don’t pay executives hundreds times more than workers • Move jobs offshore to cheaper labour markets. • Pay bribes (it’s illegal anyway!) • Overcharge for products that people need to live.
#2: BE A SUSTAINABLE AND SOCIALLY RESPONSIBLE BUSINESS How do you articulate clearly and consistently to stakeholders: • What is the purpose of your business besides profit? • How your company contributes to society? • Take a stance on social issues – business is expected to act. • Support local communities. • Protect and improve the environment. 77% of Australians felt “A company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.”
# 3 – USE YOUR CEO TO COMMUNICATE THE SOUL OF THE BUSINESS. • 80% of Australians believe that CEOs should be personally visible in discussing societal issues. • 65% of Australians expect CEOs to take the lead on change rather than waiting for government. • Unscripted and authentic drives trust more than prepared and rehearsed. The gap is widening between public expectations and CEO perceived performance. And your CEO probably knows already! According to PWC - 63% of Australian CEOs rate trust as a major business issue. (2017)
#4 USE EMPLOYEES AND EXPERTS TO TELL YOUR STORY • Use your employees to tell the company story - 74% of Australian employees trust their employer (large jump in 2018). • Experts are trusted – the media is not. • NGOs are trusted advocates for your company. • Engage with your stakeholders directly.
Closing the trust gap: Responsible Business Series
#5 MAKE HAY WHILE THE SUN SHINES! “Trust takes years to build, seconds to break, and forever to repair.” Build trust when stakeholders believe you are authentic and not facing a crisis. “Never trust the advice of a man in difficulties.” – Aesop
QUESTIONS?
TALKING WITH MIRVAC ABOUT THE TRUST JOURNEY
Jill Riseley – International Associate E: Jill.Riseley@corporate-citizenship.com T: +61 (0) 419 374 235 W: www.corporate-citizenship.com Twitter: @CCitizenship LinkedIn: https://www.linkedin.com/company/corporate-citizenship London Holborn Gate, 5th Floor 326-330 High Holborn, London WC1V 7PP United Kingdom T: +44 (0)20 7861 1616 Melbourne Unit 3, Level 7 60 Albert Road South Melbourne, VIC 3205 Australia T: +61 (0) 3 8639 0548 New York 440 9th Ave 17th Floor New York, NY 10001 United States T: 1-212-226-3702 San Francisco 6th Floor 220 Sansome Street, San Francisco, CA 94103 United States T: 1-415-656-9383 Santiago Av. Kennedy 5735 Oficina 1503 Santiago Chile T: +56 (2) 3224 3559 Singapore 2 Science Park Drive Ascent Building, 01-03 Singapore 118222 T: +65 6822 2203

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Closing the trust gap: Responsible Business Series

  • 1. RESPONSIBLE BUSINESS SERIES CLOSING THE TRUST GAP JILL RISELEY 26 OCTOBER 2018
  • 2. A QUICK OVERVIEW: What’s TRUST? Noun: firm belief in the reliability, truth, or ability of someone or something. 1. Why trust is the new essential asset for business 2. Trust trends – globally and locally 3. The impacts of trust decline 4. Quick overview of ways of measuring trust 5. 5 things to drive trust in business Followed by: A discussion with Mirvac about its trust journey with Sarah Clarke. Trust is based on competence, benevolence, integrity, transparency, reliability and identification.
  • 3. TRUST – THE ESSENTIAL BUSINESS ASSET
  • 4. TRUST AS AN ASSET: INTANGIBLE ASSETS NOW MAKE UP >80% OF AVERAGE COMPANY VALUE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1975 1985 1995 2005 2009 Intangibles Physical and financial Components of S&P 500 market value Source: Ocean Tomo (2010), “Intangible Asset market Value Study” used courtesy of Dowse CSP.
  • 5. WHY TRUST MATTERS FOR BUSINESS • Research shows Australians are traditionally among the world's most ethically active. • Global RepTrak™ studies found 60% of consumers willingness to buy, recommend, invest in, or work for is driven by perceptions of the company and only 40% driven by the perceptions of the products and services. Who you are is more important than what you sell. • Australians expect companies to go beyond just economic performance. The gap is widening between what consumers expect companies to do in CSR and company performance (or perceived performance) (Globescan). A 2015 study by the World Economic Forum found five general benefits through trust creation: • Better business terms, processes and conditions • Enhanced innovation and entrepreneurship, which contributes to competiveness • More loyal, productive and engaged employee relationships • Stronger external relationships up and down the value chain • Greater resilience to withstand shocks and crises more effectively. Trust contributes to the bottom line.
  • 10. In 2018, gap in Australia is still 15 points.
  • 13. 2017
  • 14. 2017
  • 18. AUSTRALIA: DECLINE IN TRUST IN ALL INSTITUTIONS: Australians continue to lose trust in business (and other institutions). 2018 Trust Barometer (33,000 respondents across 28 countries) found: • Only 45% of people trust businesses. • 6 in 10 people believe CEOs should take the lead on change ahead of government, more need to stop hiding and stand up for societal causes. • 49% of people think companies only think about themselves. • 66% of people think CEOs are driven by greed. • 56% of people said they have no respect for CEOs who remain silent on important issues.
  • 23. IMPACTS OF THE TRUST GAP
  • 24. A watching brief in a changing world…
  • 25. A LACK OF TRUST DIRECTLY IMPACTS ON YOUR RELATIONSHIPS WITH STAKEHOLDERS….
  • 27. WAYS TO MEASURE TRUST: RESEARCHES AND ACADEMICS BELIEVE TRUST IS BASED ON: Competence – Do stakeholders believe you will deliver quality products and services? Reliability – Do stakeholders believe you will consistently do as you say? Integrity – Do stakeholders believe you will do ‘the right thing’? Transparency – Do stakeholders believe you are open and accountable? Benevolence – Do stakeholders believe you care and have their interests at heart? Identification - Have stakeholders heard of you before?
  • 28. WAYS TO MEASURE: Trust questions can be built into existing research and engagement ie: materiality assessments – or summarized: • Do stakeholders believe you listen to them? • Do stakeholders want to collaborate with you? • Do stakeholders believe you will deliver on what you say you’ll do? OR USE EXTERNAL FIRMS: • Edelman Trust Barometer • External firms can measure stakeholder trust levels: Roy Morgan, Gallup, Nielsen or Anderson Analytics • Institute for Public Relations (US): https://instituteforpr.org/guidelines-for-measuring-trust- in-organizations-2/
  • 29. 5 WAYS TO BUILD TRUST
  • 30. In Australia, there is significant opportunity to increase trust through meeting the expectations on key drivers. 2016 Australian Results:
  • 31. #1: BE A RESPONSIBLE BUSINESS! Starting with your own house (top 5 selected by respondents in 2017 Edelman): • Pay tax – don’t move profits offshore to avoid tax. • Don’t pay executives hundreds times more than workers • Move jobs offshore to cheaper labour markets. • Pay bribes (it’s illegal anyway!) • Overcharge for products that people need to live.
  • 32. #2: BE A SUSTAINABLE AND SOCIALLY RESPONSIBLE BUSINESS How do you articulate clearly and consistently to stakeholders: • What is the purpose of your business besides profit? • How your company contributes to society? • Take a stance on social issues – business is expected to act. • Support local communities. • Protect and improve the environment. 77% of Australians felt “A company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.”
  • 33. # 3 – USE YOUR CEO TO COMMUNICATE THE SOUL OF THE BUSINESS. • 80% of Australians believe that CEOs should be personally visible in discussing societal issues. • 65% of Australians expect CEOs to take the lead on change rather than waiting for government. • Unscripted and authentic drives trust more than prepared and rehearsed. The gap is widening between public expectations and CEO perceived performance. And your CEO probably knows already! According to PWC - 63% of Australian CEOs rate trust as a major business issue. (2017)
  • 34. #4 USE EMPLOYEES AND EXPERTS TO TELL YOUR STORY • Use your employees to tell the company story - 74% of Australian employees trust their employer (large jump in 2018). • Experts are trusted – the media is not. • NGOs are trusted advocates for your company. • Engage with your stakeholders directly.
  • 36. #5 MAKE HAY WHILE THE SUN SHINES! “Trust takes years to build, seconds to break, and forever to repair.” Build trust when stakeholders believe you are authentic and not facing a crisis. “Never trust the advice of a man in difficulties.” – Aesop
  • 38. TALKING WITH MIRVAC ABOUT THE TRUST JOURNEY
  • 39. Jill Riseley – International Associate E: Jill.Riseley@corporate-citizenship.com T: +61 (0) 419 374 235 W: www.corporate-citizenship.com Twitter: @CCitizenship LinkedIn: https://www.linkedin.com/company/corporate-citizenship London Holborn Gate, 5th Floor 326-330 High Holborn, London WC1V 7PP United Kingdom T: +44 (0)20 7861 1616 Melbourne Unit 3, Level 7 60 Albert Road South Melbourne, VIC 3205 Australia T: +61 (0) 3 8639 0548 New York 440 9th Ave 17th Floor New York, NY 10001 United States T: 1-212-226-3702 San Francisco 6th Floor 220 Sansome Street, San Francisco, CA 94103 United States T: 1-415-656-9383 Santiago Av. Kennedy 5735 Oficina 1503 Santiago Chile T: +56 (2) 3224 3559 Singapore 2 Science Park Drive Ascent Building, 01-03 Singapore 118222 T: +65 6822 2203