COMMENTARY

I am an outlier when it comes to trust of business leaders and politicians ... and the motives of most of the media. As I read this I was surprised at how high average trust is rather than how low. I am really surprised at how many people have any trust in leadership at this point in history.

I qualified as a Chartered Accountant (E&W) almost 50 years ago and quickly learned how much corporate executives wanted accounts to reflect what they wanted performance to be ... and over the years it seems the rules got bent so that they could have their way, and from my perspective the accountancy profession either (1) went to sleep or (2) were outmaneuvered. Either way, society and the economy are worse off.

I am seriously concerned at how the metrics of the game of life in society and the economy have been simplified to metrics about the pursuit of wealth rather than the pursuit of happiness. Economic growth in a rich society is all about how fast we buy and waste things ... how stupid is that! Meanwhile there are billions of people who are poor and hungry and excluded from what is possible in the modern world of amazing technology because our business model does not know how to profit from this segment of the population.

Thank heavens for the young activists around the world who are protesting the totally corrupt socio-economic arrangements that have emerged over the past fifty years. They know something is very wrong. I argue that business (and other leaders and investors) have got to figure out how they can use their competence to improve the quality of life of everyone on this planet. There has to be a better way than huge military and police establishments for the repression of the human spirit ... something better than huge profits from gaming the system ... something better than increasing GDP growth by wasting more and austerity that ignores the poor and disadvantaged.

Faith in world leaders Busted trust

'TRUST me, I’m a politician' has never been a terribly convincing argument at the best of times, and trust me, I’m a businessman has rarely been much better. But as the global political and corporate elite head to the Swiss alpine town of Davos this week for the annual World Economic Forum, where they will make all manner of big claims about their plans to get the world out of its current mess, the court of public opinion seems less inclined than ever to believe a word they say.

That, at least, is the message of the latest annual “trust barometer” published by Edelman, a PR firm, on January 24th to put the global elite in a bad mood as they board their private jets and head for the mountains. This year, overall trust has declined in the leaders of the four main categories of organization scrutinized—government, business, non-governmental organizations and the media. Of the 50 or so countries examined, 11, nearly twice as many as last year, are now judged “sceptical”, with less than 50% of those polled saying they trusted these institutions. Trust in Japanese institutions plunged to 34%, from 51% in 2011, not surprising given the handling by leaders of the Tsunami and its aftermath. But the collapse in trust was even more striking in Brazil, the country in which trust was greatest in 2011, at 80%, but now, following ab series of corruption scandals, has slipped to 51% (admittedly, still above America and Britain, among others).

This headline slump in trust is due, above all, to the public losing faith in political leaders. In 2011, across all countries, Edelman found that 52% of those polled trusted government; this year, it was only 43%. Government is now trusted less even than the media, which actually enjoyed a modest recovery, to 52% from 49% last year. Trust in business fell slightly, from 56% to 53%, as did trust in NGOs, which still remain the most trusted type of institution, at 58%, down from 61% in 2011. As in previous years, the barometer is based on a poll of what Edelman calls “informed people”, which typically means professional and well-educated, though this year for the first time the views of the informed were benchmarked against a poll of the public as a whole. For each institution, the broader public was even less trusting than the informed, with government trusted by 38%, business 47%, NGOs 50% and the media 46%.

These averages hide some significant variations. Trust in government has actually increased modestly in Ireland, India, Canada and even America, and ranges from 88% trusting (or saying they do) in China and the United Arab Emirates to only 20% in Spain (despite the handover of power in the recent general election). Nobody will be surprised to learn that the least trusted businesses are banking and financial services, and the most trusted (to a remarkable degree in China and India) is technology.

In recent years, changes in trust in government and business increasingly have been in the same direction, as they were again this year, even though the loss of trust in government was larger. Remarkably, worldwide 46% of informed people say they “do not trust government leaders at all to tell the truth”. By that extreme standard, business leaders do much better, with only 27% of those polled saying they do not trust them to tell the truth at all. Nonetheless, says Edelman, the credibility of chief executives has now returned to the low of 2009. Will anything these leaders say or do this week in Davos start to reverse this reputational decline, or has it now reached the point of no return?