Trust is gained through dialogue and building good relationships with a broad range of stakeholders: colleagues, customers, investors, suppliers and the wider communities with which we interact.
Businesses are increasingly considering the interests of all stakeholders when making decisions. Firms can build trust by successfully demonstrating how they understand, prioritise and balance the needs of their various stakeholders, integrating their approaches to different groups to manage trust holistically.
This starts with the board setting the right tone – setting clear company values, purpose and culture and understanding the business’s economic, environmental and social impact throughout the value chain.
Changes in regulation and standards are also pushing companies to change the way they work. For example, the 2018 Corporate Governance Code broadens the definition of governance, including emphasising the importance of building positive relationships between companies, shareholders and other stakeholders.
A well engaged and involved workforce drives high levels of trust, both with employees themselves and wider stakeholders.
The following areas of focus can help to build and maintain trust among colleagues:
- effective and clear communication
- a focus on equality, diversity and inclusion
- considering relative levels of pay – at both the top and bottom
- encouraging individuality and authenticity, and
- supporting employee health and wellbeing.
Maintaining a positive relationship with customers and clients is the key to retaining them. Providing a positive customer experience requires your organisation to communicate clearly with consistent messages, to keep your promises, and to address mistakes quickly and openly.
According to the Edelman Trust Barometer (Financial Services Edition) 2018, the top five reasons for decreasing trust among financial services customers are:
- lack of transparency about costs
- confusing services and products
- unwanted selling
- failure to respond to enquiries, and
- difficulties addressing problems
Investors are increasingly factoring environmental, social and governance (ESG) considerations into their investment decisions, and encouraging listed companies to take account of ESG issues in the way they run their businesses day-to-day.
Factors contributing to investor trust include:
- having a clear long-term strategy, linked to purpose, values and culture
- maintaining high ethical standards across the value chain
- ensuring pay is linked to performance, especially at board and senior leadership level
- enhancing board diversity
- treating colleagues, customers, suppliers and communities well
- innovating and staying ahead of disruption, and
- maintaining an honest and transparent dialogue, especially when things go wrong.
Building trust with suppliers can support a successful, committed and collaborative supply chain relationship that drives business success and successfully manages risk.
Factors contributing to building trusted supply chains include:
- being aware of your suppliers’ financial health and helping manage risk – including through fair payment terms
- supporting supplier diversity, and
- ensuring contracts contain mechanisms for assessing social value, environmental sustainability and ethical sourcing, at a level appropriate for the size and nature of the purchase.
Many companies undertake traditional corporate social responsibility (CSR) intiatives, but increasingly businesses are integrating responsible business practices into their wider activity and long-term strategy, so they become part of how the business works day-to-day. Companies that view their CSR programmes as value-creating assets can see significant benefits to their reputation and brand, share price, market value, revenue and ability to attract and retain staff.
Wider communities encompass everything from human rights to the environment. This breadth and complexity mean that society’s demands on business have never been greater. Businesses must continue to innovate to develop new thinking and act to meet changing expectations and retain their licence to operate.
Factors contributing to building trust from wider society include:
- protecting the environment
- participating in the community
- taking action to support the UN Sustainable Development Goals (SDGs)
- paying the right amount of tax, and
- planning for tomorrow’s challenges.