Illuminating Blind Spots to Earn Trust
If there is any doubt about the impact of climate change, this summer’s wildfires blazing across Canada, accelerated by record heat and drought, should put that to rest. Yet not a day goes by without a proud announcement from one company or another about the bold steps they are taking to reduce environmental impact. If you think scorched earth and smoky air don’t square with this stream of corporate self-promotion, you’re not alone.
According to a new study from Deloitte, business executives think the public has a significant (71 per cent) or moderate (28 per cent) level of trust in the authenticity of environmental claims by companies. Yet the same study reveals most Canadians (57 per cent) have their doubts. Should we be surprised by this leadership blind spot? Not really.
Our 2023 Proof Strategies CanTrust Index shows that corporate Canada has a trust problem, and not just around environmental claims. Just 29 per cent of Canadians trust business executives for reliable information, and only 28 per cent of Canadians trust large corporations to be competent, effective and to do the right thing. In fact, just 41 percent of Canadians say they trust their own CEO. These dismal scores are largely unchanged since we began measuring trust almost a decade ago. What’s behind this?
Our view is that while many leaders are skilled and experienced in traditional business disciplines such as accounting and finance, they either have blind spots around certain behaviours that affect trust, or they’re simply not making trust-building a priority.
As CEOs are increasingly thrust into the public eye, they become synonymous with the organizations and brands they lead. This makes their low state of trust not just a leadership problem, but a brand reputation problem. To reverse this trend, we recommend the following approaches:
First, business leaders (and the boards that oversee them) need to understand the science of trust. According to researchers Roger Mayer, James Davis and David Schoorman, the ingredients of trust are threefold: ability (ie. competence), benevolence (ie. kindness) and integrity (ie. doing the right thing). Leaders and brands need to deliver these in equal measure, and on a sustained basis – not just talk about them.
Second, leaders need to be aware of the specific actions that build trust. Our CanTrust Index reveals that actions like focusing on employee safety and wellbeing, having values “similar to my own,” having a leader that communications openly, and having a clearly stated corporate or social purpose (and then acting on it) drive trust among Canadians year after year. If the CEO of a bank preaches values like “honesty” and “integrity,” but the bank is then fined for pressure-selling products its clients don’t need, trust for the CEO and the bank erode.
Third, business leaders need to understand their internal and external stakeholders. This means identifying the audiences that matter to the organization and their opinions on any given policy. Deloitte’s finding that Canadians are mistrustful and frustrated by corporate sustainability claims is useful intelligence that leaders should absorb and act upon. Not doing so reveals a blind spot or basic reputational negligence.
Finally, when it comes to Environmental, Social and Governance (ESG) claims, business leaders should be their organizations’ greatest skeptics. This won’t be easy — most leaders are naturally cheerleaders for their organizations and often on the receiving end of polished information from their staff. Many leaders are also feeling societal pressure to harness their power for good and prone to exaggerate claims. We say resist! To avoid greenwashing, or other dubious ESG claims, leaders need to commit to impact versus intent. To be radically transparent. To engage trusted third-party experts and validations. And most of all, to “show don’t tell,” at least until the story stands up to scrutiny.
Business leadership has never been more complicated, scrutinized or higher stakes – and illuminating blind spots to earn trust has never been more important.