A Time for Trust Champions

A just-released annual “Best Countries List” reports that the trustworthiness of the United States has been steadily and steeply declining since 2016. While not yet constituting a “crisis” (the United States is ranked 27th out of 80 countries), trust in the United States has slid more than 10 places in the ranking. This begs the question as to what, exactly, is less trustworthy about the United States.

Most of us understand intuitively what it means to find someone trustworthy. In most cases, this feels relatively straight-forward – after only a few interactions, we’re usually fairly certain about who we can count on, and who we cannot. But determining the trustworthiness of organizations, such as companies or nation-states, is more complicated. In what, exactly, do we place such trust?

As a concept, trust carries a variety of meanings. But, broadly speaking, experts characterize trust as featuring two key components: affective trust, or a sense “in the gut” that someone is honest with us and has our best interests at heart; and cognitive trust, or the perception that someone is reliable, competent, and thus someone we can count upon when in need.

It is tempting to regard the reported decline in trust in the United States as an inevitable consequence of the Trump administration’s celebrated disregard for the interests of other countries. How can one place their faith in a nation led by a man with a track record of dismissing established alliances while spewing “America First” rhetoric? This may lie behind a loss of affective trust in the United States.

But this is probably only a partial explanation. After all, U.S. foreign policy has always incorporated a tone of American exceptionalism, and our policies have not shifted quite as dramatically as the rhetoric might suggest. This, then, implies that the issue may be more closely linked to a decline in cognitive trust.

In fact, U.S. presidents have remarkably little direct power, thanks to checks and balances provided by the Constitution, Congress, an independent judiciary, rule of law, the free press, etc. These institutions work to promote constancy, constraint, competence and perceived reliability. But what when those same institutions are under assault and appear to be failing to fulfill their trust mandate?

Over the past decade, Gallup and others have measured a steady decline in the trustworthiness of these same institutions. Given a prolonged erosion of America’s institutional “trust infrastructure,” should we be surprised to see this reflected in declining trust in the country itself? This is less a crisis of politics, or capitalism, so much as it is a crisis in governance.

These themes took center stage at the World Economic Forum in Davos, during panel discussions on the virtues of “multi-stakeholder capitalism” over the “shareholder primacy” school, and in speeches emphasizing the imperative of muscular Environmental, Social & Governance (“ESG”) policy prescriptions to avert global crises-in-the-making.

Public affairs firm Edelman has conducted a global survey – its “Trust Barometer” – now in its 20th year. Edelman’s 2020 survey, released in Davos this week, reveals that there is low trust in all four of the key social institutions it studies: government, business, NGOs and the media. This, despite record low unemployment and an extended bull run in the capital markets.

Edelman argues that this “paradox” comes as a consequence of growing inequality, and fears for the future, particularly among the less well-informed public. It calls upon leaders (in the public and private sectors alike) to “embrace a new way of effectively building trust: balancing competence with ethical behavior.” Notably, Edelman finds that “ethical drivers such as integrity, dependability and purpose” account for 76 percent of the “trust capital” in businesses. Competence accounts for only 24 percent.

There once was a time when governments sought to promote “national champions” in business. Today, it is time for “trust champions” in the business sector to help promote restored faith in the countries in which they reside. To win and retain both affective and cognitive trust, these “trust champions” must solve for doing what’s right for those they’re meant to serve.

Consider the recent example of Airbnb in this light. The hotel-alternative company announced that it will tie staff bonuses directly to the achievement of established safety metrics, intentionally harnessing governance mechanisms to balance its interest in profit maximization and its long-term trustworthiness.

Perhaps more evidently than ever, assuring competence and ethical conduct is a governance imperative. Responsibility for such sits squarely with boards and C-suite leaders. They would be well advised to adopt a set of coherent, transparent, and effective metrics by which to gauge whether, and how, their governance mechanisms are working to promote both profitability and sustained trustworthiness. The more American Trust Champions make this a priority, the more trustworthy will be Brand America.

Erich Hoefer is co-founder of Starling Trust Sciences.

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