Twenty years ago, trust wasn’t as high on the business radar as it is now. In fact, we didn’t ask CEOs about it until 2002, when the world was reeling from accounting frauds, the bursting of the dotcom bubble and the collapse of the equity markets. With hindsight, it’s hard to believe that only 12% of CEOs thought public trust in companies in their country had greatly declined, and only 29% thought the fallout from corporate misdeeds was a serious threat.
Since then, the financial crisis has catapulted trust into the limelight, and the after-effects of stagnant economic growth and spiralling debt levels continue to fuel a climate of suspicion. The impact on CEOs has been significant. In 2013, 37% worried that lack of trust in business would harm their company’s growth. This year, the number has jumped to 58%.
Technology has exacerbated the challenge: 69% of CEOs think that, in an increasingly digitalised world, it’s harder for businesses to gain – and retain – people’s trust. So which risks arising from connectivity alarm them most? Predictably, perhaps, 87% of CEOs believe social media could have a negative impact on the level of trust in their industry over the next five years. But as new technologies and new uses of existing technologies proliferate, they say new dangers are emerging – and old ones are getting worse.
CEOs are particularly anxious that breaches in data security and ethics, and IT outages and disruptions could impair public trust in their industry. The vast majority are already taking steps to forestall such problems, although it’s the CEOs of the largest companies who tend to be most proactive in these areas.
But two-thirds of CEOs think automation and artificial intelligence pose a threat, too. They’re right to be concerned. The algorithms that underpin automation, robots and smart machines shape lives far more than many people realise. How we navigate websites, how we interact with connected devices, how the gig economy works: all are influenced by code. This creates practical challenges, like ensuring that machines carry out human orders effectively, in the way they were intended. It also raises various ethical issues, such as the extent to which it’s acceptable to influence human choices and whether the humans who write the codes – or the companies they work for – can be trusted.
Yet, if forfeiting people’s trust is a sure-fire route to failure, earning their trust is the single biggest enabler of success. As an example, the progression from assisted to augmented to autonomous intelligence depends on how much consumers and regulators trust machines to operate on their own. That, in turn, depends on whether those who create the machines have the right risk and governance structures, the means to verify and validate their claims independently and the mechanisms to engage effectively with stakeholders.
In short, trust is an opportunity, not just a risk. Many CEOs recognise as much: 64% think the way their firm manages data will be a differentiating factor in future. These CEOs know that prioritising the human experience in a virtual world entails treating customers with integrity.