Throughout the world, people blamed their governments—more than any other institution—for the financial and political crisis they endured in 2011. Globally, government suffered the steepest decline ever recorded in Edelman’s annual Trust Barometer study. This major global survey conducted by Edelman, the world’s largest independent public relations firm, revealed that only one third (33 per cent) of the Australian general population —the first time the Trust Barometer looked at this broader group—trust the institution of government to do what is right.
Looking at government in Australia, a huge gap has opened up between what people see as important and how well they think important tasks are being handled. While 71 per cent of Australians say it is important that the country’s financial affairs are managed effectively, only 18 per cent think this is happening – an ‘underperformance gap’ of 53 points. 71 per cent believe it is important that the government listen and responds to citizen needs and feedback. Only 13 per cent (58 percentage point gap) think this is happening.
“There is a complete misalignment between the public’s expectations of government and what they think is actually being delivered,” says Michelle Hutton, Edelman Australia’s Chief Executive Officer. “60 per cent of Australians do not trust government leaders to tell the truth and the majority (58 per cent) thinks the country is on the wrong track.”
Business, while more trusted than government, still has some hurdles to clear. Reflecting the current debate about the nature of ‘responsible capitalism’, this year’s survey found that to be trusted, business needs to do more than succeed commercially. 74 per cent of respondents say companies should be involved in solving social and environmental problems. The Study also examined various factors that will build trust in a company which reflect this desired role for business. Listening to customer needs (70 per cent) and having ethical business practices (69 per cent) top the list, along with delivering quality products (69 per cent). Australians also expect business to place the customer ahead of profits (68 per cent) and treat its employees well (67 per cent).
“The public expects business to do more than just make money and create jobs. They expect business to improve the world it operates in, act ethically, treat employees well and help local communities,” Hutton adds. “This is the difference between trusted and distrusted companies.”
Strong reputation and trust, built upon both operational and societal performance, is the clear blueprint for optimal business success. Given the growing distrust in government, business has an opportunity to broaden its definition of leadership, own issues which will negate the need for government regulation, and shift from seeking a license to operate to earning the license to lead.
But CEOs face another hurdle in convincing the public that they deserve a hearing. CEOs are viewed by the general public as being among the least credible public spokesperson for a business or organisation (35 per cent of respondents find them credible). Globally, among informed publics, a “person like me” has re-emerged as one of most credible spokespeople, with the biggest increase globally in credibility since 2004. For the Australian general population, a “person like me” (57 per cent) trails only academics (64 per cent) and technical experts (63 per cent) as the most credible spokesperson. Regular employees also scored highly with 54 per cent of Australians agreeing that people who work for an organisation are extremely credible spokespeople for or about that company.
“This is further evidence of the dispersion of authority,” said Ms. Hutton. “Smart businesses will talk to employees first, because people today view one another as more credible than they do established figureheads like government leaders and CEOs.”
“CEOs cannot be silent, but neither should they be centre stage. A CEO’s vision needs to be amplified and illustrated by the voice of employees, “people like me,” academics and NGOs… especially if their enterprise is going to earn the license to lead,” Hutton stated.
Growing Diversification of Media Sources
Despite very low trust in the institution of media to do what is right (33 per cent), Australians do trust traditional media sources for company information. Television (81 per cent), Newspapers (78 per cent), Radio (77 per cent) and Magazines (75 per cent) lead the pack.
Online news aggregators are also highly trusted. Online search engines like Google (78 per cent) and News RSS feeds (71 per cents) are critical.
“The prominent role of search engines in the research process highlights the importance of managing what is said about an organisation online,” said Hutton.
Technology Industry Leads on Trust
Trust in various business industries is up across the board with Australian informed publics. In Australia, Technology remains in the No 1. spot for the fourth straight year. In 2012, a few industries surged ahead in trust—Brewing and Spirits and Consumer Packaged Goods both saw an 18 percentage point gain since 2011.
There is continued distrust of banks and financial services. Despite robust increases (Banks up 17 points since 2011, Financial Services up 14 points) they both remain ranked at the bottom of the list with informed publics. General population rankings are slightly different. High prices for utilities, along with the public debate around the carbon tax, have seemingly affected trust in the Energy industry. At 41 per cent trust, this industry is at the bottom of the list with the general population.
The Global Perspective Aggregate global data points quoted below are based on informed public segment, n=5,600 globally (See methodology on pg 4)
Globally, blame for the financial and political chaos of 2011 landed at the doorstep of government, as trust in that institution fell a record nine points to 43 per cent. In seventeen of the 25 countries surveyed, government is now trusted by less than half to do what is right. In twelve, it trails business, media, and non-governmental organisations as the least trusted institution. France, Spain, Brazil, China, Russia, and Japan, as well as six other countries, saw government trust drop by more than ten points. Government officials are now the least credible spokespeople, with only 29 per cent considering them credible.
“Business is now better placed than government to lead the way out of the trust crisis,” said Richard Edelman, president and CEO, Edelman. “But the balance must change so that business is seen both as a force for good and an engine for profit.”
Overall, trust in business fell from 56 per cent to 53 per cent, with countries like France and Germany, in the heart of the Eurozone economic crisis, experiencing double-digit decreases. Meanwhile, CEO credibility declined 12 points to 38 per cent, its biggest drop in nine years. In South Korea and Japan, it dropped by 34 and 43 points, respectively.
Once again, banks and financial services declined in trust, and were the two least trusted sectors with France, Spain, Brazil, Japan, and South Korea recording the most severe drops. Technology remained the most trusted sector globally.
Media, the one institution to see an increase, saw its global trust level rise above 50 percent. It experienced significant regional upticks in India (20 points), the U.S. (18 points), the UK (15 points), Italy (12 points) and Australia (11 points).
“As the media landscape dimensionalises and delivers a wider range of options, it is becoming more trusted,” said Alan VanderMolen, President and CEO, Global Practices and Diversified Insights Business, Edelman. “The media also did an exceptional job this past year of covering the financial problems throughout the EU.”
In Japan, site of last March’s earthquake and subsequent nuclear disaster, trust fell severely in three of the four institutions including government (down 26 points), media (12 points), and NGOs (21 points) . That loss of trust extended to five industry sectors, including energy (down 46 points), media (21 points), banks (20 points) and financial services (17 points).
“The fragility of trust was never more evident than this past year in Japan, where the government’s lack of leadership and the local utility’s poor transparency revealed huge shortcomings in the command-and-control approach to communications,” said Mr. Edelman.
Traditional media and online search engines are the most trusted sources of information for people searching for general news and information, new product information, news on an environmental crisis, and company announcements. Traditional media, TV, newspapers, and magazines are still the most trusted sources of information, according to the Barometer.
Among 18 – 29 year olds, digital media is the most popular source for general news and information.
KEY FINDINGS INCLUDE:
1 For the first time in 2012, the Edelman Trust Barometer contrasts the views of the Australian general population (n=1,000 Ages 18+) with the survey’s traditional Trust respondent group of “Informed Publics” (high income, college-educate Australians who read or watch business/news media and follow public policy issues; n=200).