The trust, the whole trust and nothing but the trust...July 2015
I’ve heard a lot about trust in business so far this year. I have been heartened by the ever wise words of Business in the Community’s Stephen Howard – “authentic business leaders inspire trust because they understand the wider purpose of business”– and dismayed by the attitudes shown at a CBI business forum where CSR was still regarded as a greenwashing/whitewashing, tick-box exercise (“How can a business pillage Monday to Friday and then paint a school at the weekend? was the answer to one of my questions about the value of CSR to the trust equation.)
Given this experience and ever more ‘bad news’ recently from the banking sector, it didn’t really come as a huge surprise to hear a new study has found the term ‘trust’ increasingly misused by companies, despite its increase in use.
Apparently, companies’ use of the word ‘trust’ has risen by a factor of eight in the past decade, indicating an increasing corporate obsession with trustworthiness, according to a study by the Chartered Institute of Management Accountants (CIMA) and co-authored by Robert Phillips.
The study maintains the focus on trust is not always backed up by corporate action. “Trust often spoken is trust rarely earned,” commented Phillips.
An analysis of the use of ‘trust’ – when referring to the concept, not the legal structure – in annual reports of FTSE 100 companies over the last decade, found that the word was mentioned just 38 times in 2005, but has climbed steadily since, appearing on 317 occasions in 2014.
Tony Manwaring, CIMA’s executive director of external affairs, said: “The concept of ‘trust’ has always been misused by companies, but the past ten years has seen it achieve staggering growth as a corporate buzzword.
“This is bizarre, because ‘trust’ is not something companies can directly control – it is an outcome. It does not work as a message. Endlessly repeat the word ‘trust’ if you want, but it will not make people trust you.”
Likewise, the phrase “building trust” appeared just once in a single 2005 annual report; in 2013 it was mentioned 18 times.
Robert Phillips said: “I would happily retire the t-word from the English language for a decade or two, allowing us time to reflect on what it really means to be trusted or trustworthy. It has been used and abused to the point of exhaustion.”
Phillips argues that to be more trusted, companies need to create “public value” as well as shareholder value, and focus on profit optimisation rather than profit maximisation. He cites banking, arguing that if a bank were to make radical changes including copying the John Lewis Partnership employee ownership model, ceasing extravagant bonuses, and levying a small charge to its retail banking customers rather than claiming to offer ‘free banking’, it would begin to earn genuine consumer trust, “and quickly address the challenge of being socially useless.”
He said: “If a firm wishes to become trustworthy, the answer does not lie with crafting narratives, managing messages or meaningless platitudes. We need actions, not words.”
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