How companies can compete on trust

Stakeholder trust has never been easier to lose. Cyberattacks. Unpredictable geopolitics. Rising expectations for transparency. Rapidly shifting attitudes on sustainability. Then there’s AI, a cause both for excitement and anxiety among investors, customers, and employees. Companies are under intense stakeholder scrutiny across all these issues and more.

In PwC’s 29th Global CEO Survey, two-thirds of CEOs (66%) say their company experienced stakeholder trust concerns to at least a moderate extent in the last year on topics such as AI safety, data privacy, corporate transparency, and the impact of climate change on business performance.

Using this data, we also assessed the connection between stakeholder trust and value creation, looking at total shareholder returns for public companies in our sample. The results are striking. Companies experiencing the fewest trust concerns delivered total shareholder returns over a 12-month period that were, on average, nine percentage points higher than those experiencing the most trust concerns.

Your next move: Make trust a boardroom topic
The link between trust and value is likely to grow stronger. Technology, geopolitics, and other factors continually create new risks and vulnerabilities for a company’s operating model, impacting data, processes, and controls across every business unit and function—and ultimately eroding confidence. The companies that thrive in this environment are those that hardwire testing into critical processes, to proactively address the new risks and vulnerabilities. Being able to do that requires companies and boards to ask themselves some tough questions.

Specifically, trust should be prioritised as a boardroom topic and considered across three interlocking dimensions:

• Operational trust, built on efficient, resilient operations
• Accountability trust, resting on high-quality reporting and communications
• Digital trust, based on systems and processes that protect sensitive data, maintain secure operations, and enable organisations to use digital tools responsibly and ethically

Companies can also create a regular agenda item in top management meetings to discuss trust, covering different topics each time. For example, a C-suite team member could present an inventory of recent trust events at the company, including their impact. In the next meeting, a different leader could lead an inventory of emerging trust risks, with the team discussing an action plan for how they can respond.

Last, companies can build and preserve stakeholder trust through deliberate investments in data, processes, and controls across each of these dimensions. For example, separate PwC research shows that robust Responsible AI programmes build trust and create value by reducing the frequency of adverse AI-related incidents and helping companies recover faster if such an event occurs.