Written by
Karam Filfilan

Published
04 Aug 2017

Can we rebuild trust in institutions?

04 Aug 2017 • by Karam Filfilan

According to the 2017 Edelman Trust barometer, public trust in society’s key institutions has never been lower. In its global survey of 33,000 people, Edelman revealed that the credibility of CEOs had dropped 12 points year-on-year to an all-time low of 37%. Least trusted (by just 29% of respondents) are government leaders, while the media is trusted by only 43%. More than half (53%) of participants believe our current system of governance is unfair.

Edelman CEO Richard Edelman described the 2008 recession as the first wave of a tsunami, followed by waves of globalisation and technical change. “The consequence is virulent populism and nationalism, as the mass population has taken control away from the elites,” he said.

His hypothesis is supported by professor Veronica Hope Hailey, dean of the school of management at the University of Bath, and long-time researcher into the issues of trust in business.

“The financial crisis was a volcano moment, emblematic of something more general. Before 2008, trust in executives and organisations was already declining,” she says.

“People didn’t doubt the competence of managers, but already had reservations about their benevolence and integrity. We’ve made progress but we’re still falling down on these areas.”

Drivers of trust

Hope Hailey’s research posits four key drivers of trust in leaders and organisations: their ability in fulfilling their purpose; consistency of their actions over time; their benevolence and goodwill; and the integrity of their actions.

She believes the callous greed and lack of empathy for the working man shown by our institutions is at the root of our current ‘post-truth’, ‘sick-of-experts’ society – which culminated in the Brexit vote and the election of Donald Trump as US president.

Citing the Volkswagen emissions scandal, and Sir Philip Green’s sale of stricken BHS – which left a substantial pensions deficit – as examples of low integrity, sparking widespread anger and distrust, Hope Hailey suggests leaders have failed to connect with their base.

“Take Brexit. People who lived rural existences, or in the northeast, felt they were being patronised and that their lives weren’t of any consequence to those in power.

“I’m sure David Cameron didn’t mean that to be the impression, but research on trust shows you have to demonstrate you care. It’s not words or tweets, it’s how you live your life and interact with people face-to-face,” she asserts.

Rebuilding trust

As part of her 2012 study Where has all the trust gone?, in partnership with the CIPD, Hope Hailey’s team at the University of Bath examined trust in 14 differing organisations. Of these, six had maintained or increased organisational trust after the crash. The common theme? Robust mechanisms that held management to high levels of accountability.

When the crisis hit law firm Norton Rose (now Norton Rose Fulbright), management tried to minimise redundancies by asking employees to move to a four-day week or take sabbaticals. The voluntary scheme had to be supported by a minimum number of employees to take effect. In the end, 97% of London employees voted in favour and no redundancies were made. The bold move demonstrated senior leaders’ transparency and moral integrity, says Hope Hailey.

Keeping contact with the ‘shop floor’ is key. “At John Lewis, senior leaders man the cash registers every December.

“It’s about putting in place mechanisms that require senior people to live the life of whoever is most junior, ” she adds.

Both organisations are partnerships, where all employees share profits and have a say in leadership; both have processes for employees to feed back views to senior management. In the study, partnerships generally fared better than other models when it came to trust, because their employees felt involved in the running of the business.

For Hope Hailey, a genuine curiosity about others is a trait of a trustworthy leader. It cannot be faked.

“If you want people to follow you, you have to invest in spending time with them. You’re judged on the extent to which you are curious and genuinely trying to understand their reality.

“It might sound trite, but there‘s no trust substitute for engaging on a truly personal level,” she concludes.