"Expectation of business has expanded, supplanting Milton Friedman's famous 1970's assertion that the social responsibility of business is to increase profits," said Mr. Edelman. "It's a stakeholder, not a shareholder, world." The most important stakeholders are customers (70%), followed by employees (58%) and investors (49%), the survey found.
"Trust in business and trust in government are now moving synchronously, unlike previous years where they tended to move in opposing directions. The expectation today is for these two institutions to work collaboratively to tackle economic and societal challenges," said Mr. Edelman. Fifty-five percent (55%) say business hasn't done enough to cooperate with government to solve the global economic crisis while far fewer (38%) say the same about government.
Informed publics attribute increased trust in business to tangible actions that companies have taken in the past six months, giving the highest marks to repaying bailout money (81%), reducing CEO pay (80%), and firing non-performing management teams (78%). When asked what companies could do to rebuild trust in the long run, survey respondents put a mix of "hard and soft power" items at the top the list: treating employees well (94%), having transparent business practices (93%), and communicating frequently and honestly (91%) - along with maintaining quality products and services (93%), all of which far surpass increasing shareholder value (66%).
"The data indicate that business wins when it takes on the big societal challenges and engages in private sector diplomacy," said Neal Flieger, chair of StrategyOne, the research firm that conducted the survey. Informed publics place great importance on business's commitment to finding solutions for global issues like global warming, energy costs, and access to affordable healthcare but say business has not done enough to create solutions for these causes (71%, 70%, and 64%, respectively).
India and China are the most positive about business. At 75%, India recorded the highest level of trust in business of any of the six countries surveyed. China followed with 60% saying they trust business to do what is right. "The private sector is perceived as enabling an economic growth that has led to healthier living standards. The survey numbers reflect a high degree of national pride in the accomplishments of business," said Alan VanderMolen, president, Asia Pacific, Edelman.
In China and India, 96% and 81% of informed publics, respectively, say their country is headed in the right direction, compared with 47% of Americans and Germans, 37% of British, and 31% of French. In another marked contrast to the West, nearly seven out of 10 informed publics in India and China rate the reputation of large multinational corporations as good or excellent, compared with 30% of Americans, 29% of Germans, 24% of French, and 13% of British.
After a sharp decline in January 2009, trust among the younger population of 25- to 34-year-olds rebounded. In the United States, 58% in this age group say they trust business to do what's right - up by 26 points and nearly back to its high of 60% in January 2008. Germany also saw a rise among this age group, with a 16-point increase in six months.
Trust in all the major industries routinely surveyed in the Barometer went up across the six countries, with technology now 15 points ahead of the next most trusted industry - biotech/life sciences. Eighty-nine percent (89%) of informed publics said they would trust companies that drive better innovation by investing in research and development. Troubled sectors such as banks, automotive, and insurance stabilized in the period. In China and India, banks are the No. 2 most trusted industry. In the U.S., trust in every industry experienced double-digit growth, except technology, which was already high but climbed another eight points (from 72% to 80%). Trust in the pharmaceutical and auto industries each jumped by 14 points, from 39% to 53% and from 32% to 46%, respectively.
In a recessionary time, cost is only a marginally more important factor than trust in determining people's product choices, with 53% saying that in the past six months they switched brands for a lower cost and 45% saying they switched because they lost trust. "Trust is now a tangible in both corporate reputation and product marketing," said Mr. Edelman.
