Trust deficit across Irish society: Can business respond?
Trust levels in Ireland sit close to the bottom of 26 countries surveyed, just ahead of Russia, Japan, South Africa and Spain. The majority of respondents distrust government, NGOs, the media and business; do not see their economic prospects improving over the coming years; and believe that in its current form, capitalism does more harm than good.
At a time of high employment and economic growth, trust across Irish society should be surfing high on the wave of prosperity. That is not the case and Ireland finds itself in a type of trust paradox with strong economic performance on the one hand and issues of belief in our institutions on the other. The 2020 Trust Barometer points to seeds of public discontent.
There appears to be two very different realities at play, with higher levels of trust (17 per cent gap) recorded amongst those who are wealthier and more frequent consumers of news. In comparison, Ireland looks very different for others who do not trust business, Government, NGOs and the media to do the right thing.
There is a sobering reality in how Irish people view their economic prospects. This may in part be explained by concerns many have that the generational promise of a better future is becoming remote. Just 37 per cent of the public believe that they and their families will be better off in five years’ time, and more than four in ten fear being left behind.
As an open economy, issues relating to globalisation are also causing concern and there is growing employment anxiety. 79 per cent of respondents said they are worried about losing their job due to the possibility of a looming recession, proliferation of AI and automation, and the impact of the gig economy.
The majority (57 per cent) agree that in its current form, capitalism does more harm than good and that “the system” is failing them. There can be no doubt that capitalism has been proven to work for society. No other system in the history of economic and political management has emerged that has outperformed responsible capitalism. Without profit there is no opportunity to reinvest, to innovate or to allocate the resources that society needs to protect itself and to prosper. However, it would appear that the Irish public is questioning the fairness of the system. Perhaps not a surprise as capitalism is always the most obvious target of discontent.
Over twenty years of the Edelman Trust Barometer, people’s sense of trust has been influenced by whether an organisation is good at what it does. This is changing. As we face into a new decade, people are looking for more and the battle for trust is set to be fought based on ethics more than on competence.
When it comes to business, the public sees competence as a given, accounting for only a quarter of its trust capital. Financial performance, good product quality and sound strategy are basic requirements. Business is now expected to operate to another standard with ethical behaviour three times more important to company trust than competence. People want to be treated as citizens by companies not just as consumers.
Many companies are recognising this and are taking action to re-align behaviours in ways that are more inclusive. In the US the Business Roundtable has redefined the purpose of a corporation. Some 181 leading Chief Executives have committed to improving society by not only meeting the needs of shareholders but also the needs of customers, employees, suppliers and communities.
These are positive developments led by business leaders who understand that their mandate has gone beyond corporate social responsibility to embrace fundamental operational change. For businesses, it is no longer only a matter of what you do—it’s also how you do it.
It would appear that this is also the public expectation in Ireland. The vast majority (91 per cent) believe that customers, employees, suppliers and communities, rather than shareholders, are most important to the long-term success of a company. They want companies to be profitable and improve the communities where they operate. 72 per cent agree that a company can do both.
Increasingly, CEOs are also expected to lead from the front: 90 per cent believe that business leaders should be vocal on issues that impact people’s future, including training for jobs of the future, automation’s impact on jobs, technology’s impact on ethics, privacy and climate change. Three in four believe CEOs should lead on change, rather than waiting for government to step in – a 12 point increase in the last two years.
Business is also expected to empower employees to be part of the solution. People trust that which is local, and so employers continue to be the most trusted relationship amongst almost three-quarters of workers. They want jobs that empower them to play a role in shaping the future of society (66 per cent) and to have a voice in planning that future (67 per cent).
Business has nothing to fear as the twin objectives of profit and societal improvement are complementary. If a business is ethically strong, it is more attractive to investors, employees and consumers, resilient to risk and insulated from regulation.
Balancing what shareholders want with what society needs yields a trust premium. The opportunity for business is to meet that challenge.