A new report on public trust in business states it clearly: “The issue of public trust in business has never been more urgent or consequential than it is today. In many ways, the current global economic downturn is, at its core, a crisis of trust.”
The report, “The Dynamics of Public Trust in Business—Emerging Opportunities for Leaders: A Call to Action to Overcome the Present Crisis of Trust in Business,” published yesterday, was prepared by The Business Roundtable Institute for Corporate Ethics, which is housed at the Darden School of Business and involves the leadership of several Darden professors, and the Arthur W. Page Society. The report concludes that public distrust in business is negatively affecting companies across industries.
“When individual businesses and industries lose trust, their ability to execute business strategy is significantly diminished,” said Darden Professor R. Edward Freeman, who serves as Academic Director of the Business Roundtable Institute for Corporate Ethics. “When distrust becomes widespread, the result is the large-scale destruction of value for both business and society that we have seen over the last several months.”
Freeman was one of six authors, along with Darden Professor Jared Harris. Professor Andrew C. Wicks was a contributing writer.
To proactively restore trust, the report identifies concrete actions to build mutuality, to balance power and to create trust safeguards:
Create a set of values that define and clarify what your enterprise and its people are at root, and work to ensure that these values are adhered to consistently across your enterprise.
Build and manage strong relationships based on mutual trust with mediating institutions.
Embrace transparency
Work within your business sector to build trust in the sector.
Re-invest in the trustworthiness of your firm by making a commitment to enhance the core contribution that the firm makes to society.
As a next step, the Institute and the Page Society have launched a major new effort called “The Project on Public Trust in Business” to engage leading organizations in developing and implementing a long-term strategy to help restore public trust in business.
Read the full report, or watch the BusinessWeek video “Winning Back Public Trust.”
Founded in 1955, the University of Virginia’s Darden School of Business improves society by developing principled leaders in the world of practical affairs.
For additional information, contact communication@darden.virginia.edu.