• What Influentials Want
  John Weckenmann
• Variances in Trust
  Rob Flaherty
• Moving the "Authentic Enterprise" Forward
  Tom Nicholson

Trust is Higher in Emerging Markets Than in Developed Nations: What's Behind the Finding?

Our global survey of influential citizens and their views of corporations and CEOs is sobering evidence that those of us in the reputation business have a lot of work to do. The findings paint a vivid picture of the growing distrust of the corporate world, especially in the developed Western nations.

The results reveal a giant gap between what corporations are doing and what the public expects them to do – in areas ranging from employee compensation and healthcare benefits to environmental stewardship and ethical behavior. That gap can be viewed two ways: (1) It's all bad news because companies are just failing to deliver, or (2) Expectations are very high because corporations play an increasingly prominent role in society. According to data from U.N. Global Compact reports, of the 100 largest economies worldwide, 51 are companies. Because of their increasing size and scope – and the inability of some governments to address big problems – much more is expected of corporations today. As a result, leaders have to recognize that, in a multi-stakeholder world, a company and its CEO must pay attention to more than just the financial performance of the company.

My favorite finding was the answer to this simple question: Would you like to be a CEO? Essentially we were asking, “Would you like the big corner office and all the perks right now with no long climb up the corporate ladder?” The answer in most of the world: No way. Only 33 percent of Influentials in Germany said yes; 67 percent said no. There were similar numbers in the U.K., Canada, France and the U.S. Only in Brazil, India and China is it popular to be a CEO (84 percent of those surveyed in India said they would want the top job).

That gap – between developed and developing nations – held true throughout the survey. Trust in corporations is in the 7-14 percent range in the developed economies, but 31-37 percent in Brazil, India and China. Why the disparity? Initial speculation might include the fact that there have been some painful and very high-profile corporate scandals in most of the Western nations. Some might suggest that influential citizens in developing nations are somehow inherently more trusting (a doubtful notion). Others will say that there are very different levels of freedom of the press from, say, the U.K. to China. It’s certainly true that in countries with an unbridled media, CEOs and their companies come under constant scrutiny, and it's getting more intense with the daily upbraiding in the blogosphere.

But here's another explanation: How popular are you if you are always cutting costs? How popular are you as an institution or leader if you have to fire people? Not very, and the fact is that the economy in the major Western countries is growing in the 0-3 percent range – a tough context for any business. In BRIC countries, the growth rates are 8-11 percent. Perhaps companies and their CEOs are heroes when they're offering countless jobs and raising the standard of living for thousands of people.

The bottom line is that trust is declining and expectations are rising everywhere. Business leaders have to acknowledge these expectations and focus more attention – and action – on stakeholders beyond investors. But if you're advising corporate leaders in the developed world, you have a steeper hill to climb. If you're in the developing world, maybe there's an opportunity to get out ahead of these expectations before a more moderate-growth economy discounts your current goodwill.