A colleague (thank you Colin) sent me an article that appeared in The Sunday Telegraph titled “A Question of Trust.” Author Dan Roberts commented on how British chieftains were feeling unloved and unappreciated despite their roles in creating more corporate distrust today. I always find it important to remember that U.S. CEOs are not alone in widening the trust gap. The article cites a 1970s poll that found 60 percent of the British public believing that big business improved their lives with better products and services. Fast forward to 2006 and this figure falls to 21 percent. In other words, the vast majority in the UK do not see the benefits of business. The $64,000 question (or is it now the $64,000,000 question) is what is business doing about this neverending reputation crisis both in the US and UK.
The author brings up the usual culprits of corporate distrust — CEO pay, outsized hedge fund and private equity bonuses, accounting scandals and poor crisis responses that increasingly impact more people. Roberts concludes: “Until executives can reduce the number of these high-profile slips and convince us that the spoils of their success are distributed more equitably, no amount of PR drives and corporate social responsibility initiatives will close the trust gap.”
Roberts needed to add boards of directors to his call to action. I can’t say that boards are managing as well as they could with their new found power base post-Enron. Too many CEOs are being shown the door despite the fact that the same boards hired and monitored these newly departed CEOs. Boards need to be held equally responsible, like CEOs, for eroding public confidence in business. Think HP. By hiring the right CEOs and providing the right oversight, boards must play a greater role in reducing that trust gap further.
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Business trust, UK, public trust, reputation crisis, crisis response, CEO pay, board reputation
