The chair of a firm operating in Australasia says businesses need to make trust a priority in ‘turbulent’ times, rather than just quick profits
Baker & McKenzie chairman Eduardo Leite argues a lack of public trust ‘runs deep’ in both leaders and institutions, despite recent positive economic data.
Writing on the World Economic Forum blog, Leite said though there is evidence of economic growth, consumers ‘don’t believe it’ and ‘don’t trust’ the forecasts.
“They [consumers] look around and see that unemployment and income inequality remain stubbornly high. They see an increasingly insecure world, with rising political, economic and cultural tensions and change,” Leite said.
“This lack of trust is something we should all be worried about, because trust matters. For many companies, particularly professional services firms like the one where I work, trust is at the centre of the business model.”
Leite – who was writing as the World Economic Forum’s annual meeting in Davos commenced this week - cited statistics from America that show a lack of trust in Congress in America, as well as the media and business.
While trust in CEOs has slightly improved since 2009, trust in other sectors – and particularly in financial services - remains at an all-time low.
Leite called on companies around the world to do more than just comply with rules and regulations, in order to rebuild trust with the public.
“To start with, companies must do more than just comply with rules and regulations. They must also be seen to be doing the right thing,” he said.
The rule of law – and law firms - would also be critical to ensuring public trust.
“We must focus on building trust in the rule of law. For both businesses and economies to thrive, we need clear rules, a high level of certainty about the legal parameters of decision-making, and clear consequences for unlawful behavior.”
Leite said that most importantly companies needed to show their dedication to a broader purpose if they were to win back the trust of the public.
“They need to prove they are not just driven by quick profits, but also by values. This is the new order in the wake of the turbulent global times of the past five years.”
Leite said most companies appreciate high trust levels lead to a stronger reputation, sustainable revenues, greater customer advocacy and increased employee retention. “It is also likely that companies with higher levels of trust will bounce back from future crises far quicker than others,” he said.