Trust in business and government is rebounding in the U.S. and Europe, as concerns raised by the corporate scandals of the past couple of years begin to fade. But European opinion leaders remain more skeptical of U.S. companies than their counterparts are of European or Asian companies doing business in America.
The fifth annual Edelman Trust Barometer found that 51 percent of U.S. opinion leaders—business-savvy, college-educated individuals with incomes of more than $75,000 or equivalent—now trust U.S. business “to do what is right,” up from 41 percent in June 2002 and 48 percent in January 2003.
By comparison, European opinion leaders’ confidence in business rose to 40 percent, up from 35 percent in January 2003. And trust in business is strong in both China (50 percent) and Brazil (60 percent).
However, U.S. companies remain the least trusted in Europe (38 percent) and French-based companies are the least trusted in the U.S. (34 percent).
“Despite the corporate scandals of the last few years, the image of business is proving resilient with a stronger global economy and tougher government regulations such as Sarbanes-Oxley in the U.S.,” said Richard Edelman, president and CEO of Edelman, presenting the findings at the World Economic Forum in Davos. “Now business has an opportunity to take a lead on key global issues, such as fair trade, intellectual property rights and obesity. American corporations must particularly focus on building credibility in Europe, by emphasizing their global brands, while engaging in meaningful dialogue with local stakeholders and in partnership with governments and NGOs.”
Jeffrey Sonnenfeld, associate dean of the Yale School of Management, says the survey “shows the international image challenge to U.S. CEOs. The rest of the world sees these great firms in a far more skeptical light than at home, no matter how ubiquitous their products. Today’s ‘new breed’ of CEOs need to be a global leaders by being conscious of local cultures and sensitivities.”
Trust in government also increased in the U.S. and Europe. Forty-eight percent in the U.S. expressed trust in their government, up from 39 percent in January 2003. In Europe, trust is 31 percent, up from 25 percent in January 2003. Fifty-four percent in Brazil and 67 percent in China expressed trust in their respective governments.
The Bush administration is the least trusted government in key global markets. Twelve percent of opinion leaders in Germany, 13 percent in France, 20 percent in Brazil, and 21 percent in the UK trust the Bush administration to “do what is right.” And 66 percent of Germans say they are less likely to purchase U.S. products because of the Bush administration, and 65 percent are less likely to purchase British products because of the Blair government. In France, 64 percent are less likely to purchase U.S. products, and 59 percent are less likely to purchase British products due to the current administrations.
Opinion leaders’ trust in non-governmental organizations (NGOs) remains strong, particularly in Brazil (64 percent) and Europe (41 percent), where they are the most-trusted institutions. Two of the four most trusted brands in Europe are NGOs (Amnesty International and World Wildlife Fund), and they are ranked among the most trusted brands in the U.S.
The study found that in every market, tangible corporate behaviors—such as “a history of delivering top quality products and services” and “listening to customer attitudes and opinions on satisfaction”—drive trust.
Colleagues, friends and family, and “regular people, like yourself,” plus experts who are seen as having no vested interest in the welfare of a company—academics, doctors and representatives of NGOs—are the most trusted spokespersons. In the U.S. and Europe, fewer than two in every 10 people said that CEOs or CFOs are credible sources of information.
“You can’t buy credibility with just a fat advertising budget, so you need to engage the public—and employees—with every available tool, and in language they understand,” says Michael Deaver, Edelman’s vice chairman. “Successful companies will avoid CEO-speak and communicate with their target audience through their national media using credible third parties, and directly via the Internet.”