The global financial crisis has already shown just how important trust is, and how easily it can be damaged. But in a world that’s changing beyond all recognition, the very purpose of business – not just its practices – will come into question.
Popular demand for greater organisational transparency is rising. The pressure on the environment is also mounting as the global population grows and becomes more urbanised. And social inequalities are creating discord in some countries.
Meanwhile, social networking has made it much easier for people to air their complaints – a trend that will increase as large swathes of the populace become wealthier and better educated. Some consumers may also decide to get their message across by becoming choosier about how they spend their discretionary income.
Rising consumer expectations will, in turn, give other stakeholders more power. Consumers increasingly care about the impact of business on their local communities, and governments and investors are motivated by what voters want.
Most executives already recognise that business has social as well as financial responsibilities. They believe it’s important to balance the interests of different stakeholders, rather than focusing solely on investors, employees and customers. But there’s a big gap between what they aspire to do and what they actually do.
Many companies only measure their financial performance, for example. Similarly, they define risk solely in terms of incidents that could upset their finances. That won’t suffice in the future. All organisations will have to factor broader, non-financial considerations into their business decisions.
They will have to measure the full impact of all their activities: not just the fiscal and economic effects, but the social and environmental effects, too. This will enable management to understand the trade-offs between different strategies and make the best decisions for every stakeholder. Making the right decisions and reporting the results will also help companies earn more trust, more custom and thus more profit.
20 May 2016
A collection of thoughts and stories from business leaders and the public about building trust in business.
28 Apr 2016
Great Expectations, PwC's surveyed over 250 next gens of family businesses to understand the issues they face as they prepare to take over. What we found is that succession, professionalisation and digital/technology are still top of mind for the next gen.
11 Aug 2015
How can public and private institutions be redesigned to build trust in the digital age?
20 Jan 2015
PwC’s 18th Annual Global CEO Survey explores who CEOs are partnering with and why these dynamic partnerships are important.
15 Oct 2014
How many chief executives want to create a socially valuable legacy? And how many of those can balance such longer-term priorities with the urgent demands of their investors and shareholders? This juggling act is hard to pull off — even for the minority of CEOs surveyed who desire this legacy.
21 Jul 2014
Understanding the needs and opinions of investment professionals is crucial if management teams are to prepare truly useful financial reports and accounts. PwC has conducted a series of surveys of investment professionals aimed at maximising the effectiveness of corporate reporting.
14 May 2014
CEOs are increasingly seeking “good growth,” aligned with business ethics and sustainability. Dennis Nally explores the importance of building trust for business.