Trust in an age of cynicism
The credit crunch and events of the last few years have heralded radical change in the relationship between business and society. The widespread perception of a growing disconnection between corporate behaviour and ethical conduct has triggered a sense that public trust in business has declined. This distrust challenges the raison d’être of many businesses and the adequacy of the current license to operate. But the additional challenges of climate change, resource shortages and people’s changing expectations all mean there will be no respite. The pressure for change will merely intensify.
At the same time there is a growing recognition that over the next 25 years the private sector, more so than ever, will play a critical role in underpinning society. Wealth creation is needed not only to overcome the current plight of western economies, but also to ensure we can survive the financial tsunami of pensions and healthcare provision that’s appearing on the horizon.
Arguably this situation demands a new settlement between business and society, one that can only be created if we understand the changes to the dynamics of business which have led to this perceived breakdown in trust. In this new era, the focus should be on ‘how’ wealth is created and whether it can be created in a more responsible way.
When the history books are written, we will look back at the last few decades and realise they were a period when not enough attention was focused on human behaviours, particularly those of the wrong sort which flourish in some organisations. Behaviours which have sadly tainted the whole of business in the eyes of society at large.
So, what can be done to build and sustain trust in business? Is a new settlement between business and society, one based on a new form of corporate responsibility, the right tone from the top, the answer? Past actions suggest that regulation is no substitute for trust. What’s needed is a new ‘responsibility agenda’ requiring business to embed the right culture and behaviours that can deliver both public trust and business success. What appears to be emerging is a recognition that a new settlement needs to have at its heart the following factors:
- Corporate purpose. Why does business exist? Rethinking the relationship business has with society at large will be a central element of this new settlement. The mantra of ‘shareholder value’ may well become balanced with something that reflects the mutuality of the challenges facing the world. An increasing number of companies recognise the need to focus more carefully on their total contribution to society rather than just the financial returns they generate.
- Leadership and tone from the top. There is a growing recognition that the management of risk and the ability of organisations to outperform comes from culture and behaviour not simply business process. In the new settlement this should be a central plank of the change agenda. Business leaders will be expected to lead by example – to promote integrity and professionalism and to show restraint.
- Authenticity will become the order of the day. A word that trumps transparency. The new settlement will expect leaders and companies to communicate and engage with key stakeholders in a manner which is not just transparent but also authentic. Put simply if it’s worth saying, it has to be personal and from the heart.
This is the journey ahead. Business as usual is no longer sufficient. The public has high expectations and the business community has a critical role to play in the development of society. If it steps up to the plate its license to operate will be secure.
Throughout October and November, The Independent Online is partnering with the Battle of Ideas festival to present a series of guest blogs from festival speakers on the key questions of our time.
Richard Sexton is the head of the UK Assurance practice for PwC and is a member of the UK executive board. He is speaking at the keynote debate Trust in an age of cynicism at the Battle of Ideas festival on Saturday 30 October. Photo: Getty ImagesTagged in: Battle of Ideas, business, society
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