CEO Blog: To be trusted, businesses must be trustworthy

I have written previously about the danger of the promulgation of the ‘fake news’ message and how it risks undermining public trust. And as a Commissioner on the Vibrant Economy, I was delighted to contribute to Grant Thornton’s Business Case for Trust publication which highlights the importance of trust in business.

More than ever, it is clear that trust in business is not just a matter of economics, but is now a matter of survival.

Without trust, there can be little belief or confidence in an organisation by its employees, its suppliers, its customers or the communities in which it exists. A business that is not trusted will not develop effective supplier relationships, will not retain its talent, will fail to achieve repeat custom and eventually will cease to exist.

Trust is that important.

Therefore, I was delighted recently that the EOA, supported by Co-operative Development Scotland, was able to publish new, compelling evidence from a YouGov survey about the higher levels of trust in UK employee-owned businesses, as viewed by the general public, who of course are both employees and consumers.

This important YouGov survey reveals over 50% of people polled think the UK economy would be better placed if it had more employee-owned businesses. Almost 60% of people believe that employee-owned businesses are more trustworthy than other forms of business.

This evidence is critically important at a time when the latest Endelman Trust Barometer reveals that trust is not about a faceless organisation being trusted, it’s about the individual leaders and representatives of an organisation being trustworthy.

The public are discerning and will not be fooled by a business that simply expresses its trustworthiness in a catchy strapline or a slick advertising campaign. Never have slogans such as ‘keeping it real’ and ‘walking the walk’ been more relevant.

However, creating sustainable businesses in which employees develop as trustworthy representatives of the business requires a different approach to both structure and culture.

Firstly it requires a culture which recognises that it is not the capital that is employed in the business that makes the difference; it is the people that employ the capital that matter most.

With people at its heart, a trustworthy culture is both transparent and engaging, with structures that support greater employee voice and democracy. This transparency means sharing details of business performance and targets, often along with financial information, so that every individual can see the relevance of their own contribution. And there is honesty in the information shared. If there is bad news, it is shared, not hidden – in that way, every employee knows that they are trusted and can consider their own personal contribution to the solutions.

Democratically, these are organisations that provide a platform for the representative employee voice to be heard, and where employees are often involved in strategic decision making. And with greater empowerment and engagement these are also organisations that enable employees to act more swiftly, taking decisions at a local level to support customer relations.

This latest YouGov survey of the employee-owned business sector is another indicator of this sectors importance to the long-term sustainability of the UK economy, adding to the large volume of data which evidences its contribution to business productivity, resilience and innovation.

The challenge of building and sustaining trust in society at large is one which business has a responsibility to contribute too. With the pillars of trust being openness, transparency, engagement and honesty, having more employee-owned businesses in the economy will help achieve this.