As 2020 draws to a close, pandemic fatigue has clashed with a second global surge in COVID-19 cases. A new round of full or partial lockdowns has spread across Asia, Europe, and North America, hampering economic recovery and reversing progress made earlier in the year. Businesses around the world face an urgent challenge, both to reassure their employees and customers that their health and safety are top priorities and prove that they are trustworthy members of society.
Even though businesses of all sizes are playing a crucial role in keeping countries afloat—and will be the engine that restarts economic growth when the pandemic is over—majorities of people in many countries remain loath to trust them. This is evident in special editions of the Edelman Trust Survey released in May and September 2020, which are composed of public opinion surveys from eight advanced economies plus India, China, and Mexico. Results show an ongoing crisis in public confidence in the private sector and its leaders. For example:
• 51% of respondents believe business is doing poorly, mediocre, or completely failing at putting people before profits.
• 51% of respondents said that businesses were not implementing adequate safety measures to protect both workers and customers.
• 39% of respondents say that business is doing well or very well at protecting employees’ financial wellbeing and safeguarding their jobs, and a similar number believe companies are doing enough to help smaller suppliers and business customers stay afloat.
• 14% of employees have confidence in CEOs and senior managers to take the lead in making return to work decisions. CEOs also rank last among groups respondents believe are doing an outstanding job meeting the demands placed on them by the pandemic.
These findings reflect widespread disappointment in the private sector and a sense that businesses have fallen short of expectations in their responses to the crisis. The imperative now is to close that trust gap. CIPE’s work is fueled by the belief that trust in businesses and the economic institutions in which they operate is essential for the broader legitimacy of democratic and market systems. Democracy cannot thrive if citizens lose trust in its ability to deliver fair and broad-based opportunity and prosperity.
Revitalizing the Response
The idea of stakeholder capitalism—or the view that companies should focus on the needs of all constituents, not just shareholders—has been around for decades. Since the beginning of the pandemic, however, it has taken on renewed focus.
For example, research shows that focusing on environmental, social, and governance (ESG) factors creates value. CIPE and the Duff and Phelps Institute recently explored this topic in a series of online events. These events highlighted how some businesses, alarmed by how the pandemic has aggravated societal inequities among women, minorities, and other traditionally disadvantaged groups, have responded by doubling down on their ESG commitments.
Furthermore, while guidance abounds about how companies should safely reopen and return to work, recent worker surveys show that businesses and executives will be judged on more than this. Employers will be evaluated by (1) what they did to help their employees and (2) whether they were a force for good in society. Shoring up trust demands a laser-like focus on these two areas.
• Disseminate scientific information from public health experts. The business community—particularly global brands, chambers, and associations—should proactively provide reliable, useful, and accurate scientific information from public health experts in addition to government-provided information. Many people have expressed skepticism about the accuracy of government data and a desire for businesses to help disseminate trustworthy information. A Freedom House report released in October that covers 192 countries demonstrates this in the following findings:
◦ 62% of respondents said they distrust what they are hearing about the pandemic from the national government in their country. Among countries classified as “Not Free” by Freedom House, 77% distrust such information.
◦ Respondents expressed more confidence about information from local leaders, but 53% distrust local government sources as well. About half (52%) of respondents across 66 countries agreed that the virus has “led to a proliferation of disinformation coming from the government.”
• Prepare employees for what a return to work means. Will businesses require wearing a mask, contact tracing, testing, or vaccinations? Edelman’s September survey finds that only two-thirds of people would take a government–approved, no–cost vaccine when available. The most problematic countries are the U.S. and France, with 42 percent of American and 49 percent of French respondents unsure or determined not to take the new vaccine.
• Move forward together. As Richard Edelman put it, “As business performance rebounds, restore salaries that were cut, pay bonuses for those that had strong performance despite COVID and promote those who have earned it.”
• Partner with government, civil society – even competitors. Even though governments or non-profits may seem like more natural allies during this crisis, 65% of people say that if a company were to collaborate with competitors for faster development of more effective responses to the pandemic, it would maintain or increase their trust.
• Focus more strongly on integrity. Take specific steps to demonstrate that business is not exploiting the pandemic for its own ends (think: price gouging on essential supplies) or exacerbating larger societal problems (think: keeping wages low, laying off workers, and limiting sick leave). Still more powerful would be to keep good governance and anti-corruption front and center in this moment of crisis.
Measures like these, taken by businesses of all sizes around the world, will help fill the trust void. They will demonstrate that businesses are willing and able to deliver on the promise of stakeholder capitalism.
Ritika Singh is a Global Program Officer at CIPE and former Senior Manager of Asia Government Affairs and Public Policy at Walmart Inc.