“The trust of the innocent is the liar’s most useful tool,” – Stephen King
I realise this is quite a challenging quote to begin with, but as I write this, I’m sitting in my office with the results of the latest Edelman Trust Barometer and, depressingly, the financial services industry was once again the least trusted sector globally. In South Africa, trust in the industry declined a further six points over the previous year’s report.
Ongoing scandals don’t help. South Africa is still reeling from the Steinhoff debacle which saw local investors, including those saving for retirement in pension and provident funds, lose millions of rands. In addition, the VBS scandal – one of the most shocking examples of bank fraud in South Africa’s history – erupted last year.
The financial services industry isn’t the only poor performer in the Report. Faith in our institutions has faltered, and trust in our leaders – be they corporate or government- is at an all time low. We hardly even trust anything we read anymore, thanks to the proliferation of fake news and the chilling realisation that there are bad actors who intentionally mislead and drive the public, like sheep, towards their agendas and causes.
For the past couple of decades companies have focused increasingly on ‘reputation’ as a corporate asset, and a whole field of advisers has emerged to help companies measure and manage their reputations.
Interestingly, the Edelman report points out that reputation, while important is inherently backwards looking. It is about what a company has or hasn’t done, what its leaders have said, and how they’ve behaved.
Trust, on the other hand, is forwards looking. “Trust is a bet that stakeholders place, trusting that the organisation will deliver against their positive expectations,” says the Report. If you think about it, that is how it works. If you trust an individual or a company, you’re saying that you trust them to act in a certain way not only in the present, but also in the future. Yes, you might base your expectations on past behaviour, but you’re projecting it into the future.
What are the elements of trust? Edelman boils trust down to four:
Ability: The perception that an organisation is good at what it does;
Integrity: The conviction that an organisation and its leaders are honest;
Dependability: The expectation that promises will be kept; and
Purpose: The sentiment that the company is trying hard to have a positive impact on society.
The last element is particularly thought provoking, though not that surprising. Profit as the sole motive for business is no longer sufficiently meaningful to consumers. They realise the impact that companies have on their lives and communities and want more than just an excellent set of financial results.
In closing, I chose the Stephen King quote because, while harsh, the financial services industry has, time and again, been guilty of lying to the innocent – consumers who lack the knowledge and expertise to catch them out. When will it end?
Article by Richard Rattue, Managing Director, Compli-Serve SA