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Corporate Trust in America | Matt Kelly What's Next | Expert Advice | Compliance Next - YouTube
Channel: Compliance Next
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[Music]
Hello everyone and welcome to another episode
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of “What's Next in Compliance?”
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I'm your host, Matt Kelly, and today we're
going to talk about trust.
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Corporate America has a big problem with trust
and the lack thereof.
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We're going to explore why that might be and
how ethics and compliance officers can help
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improve trust within an organization.
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First, some numbers.
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According to the Edelman trust report, which
is a large long-term, well-respected survey
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on these matters, trust in organizations is
declining all over the world.
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Trust in businesses specifically fell from
53 percent one year ago to 52 percent today.
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So, overall, businesses still qualify as trustworthy
- but just barely.
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And in 13 of 28 countries surveyed, trust
in businesses did stumble below 50 percent
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into the distrusted category.
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So second is a point from PwC s annual CEO
survey, which came out earlier this year.
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That report raised the idea of organizational
trust and the idea that businesses able to
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generate organizational trust will be better
positioned to succeed in our very skeptical,
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untrusting world.
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There's a lot of sense in that idea and, as
the Edelman report shows, companies aren't
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doing a good job at generating that trust
right now.
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So what's going on?
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A lot of it has to do with new levels of transparency
and communication in our digital age - as
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more stakeholders can see more of what a company
does, those groups - employees, customers,
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business partners, the public - they can form
opinions about what a company’s motives
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and values are more quickly, regardless of
how accurate or inaccurate those opinions
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might be.
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Consider what that means.
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If stakeholders can perceive a company's motives
more easily and decide that they dislike those
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motives, trust falls.
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If the company's motives are something that
those groups do like, trust grows.
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So really, this is about trustworthiness,
which we could define as a company's ability
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to demonstrate that its actions are reliable
and motivated by values a stakeholder group
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will agree with.
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So the PwC report says trustworthiness is
crucial to preserving your company's business
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advantage.
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Good.
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The Edelman report says companies are losing
trustworthiness rather than creating it.
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Bad.
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Therefore, if a company wants to maintain
its competitive advantage, it has to do a
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better job of demonstrating that its actions
are reliable and based on values that stakeholder
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groups will accept and this is a job tailor-made
for the corporate ethics and compliance officer.
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So what should compliance officers be doing
with this information?
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I have two ideas.
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First, try to measure the weak spots in trust.
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For example, do surveys of employees’ faith
in management or customers’ faith in your
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brand.
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Try to identify the business practices that
help or harm those different stakeholder groups’
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perceptions of the company.
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Might be in customer service, it might be
in sales negotiations, or adequate compensation
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or training, but if you can identify those
practices and measure the prevalence of them,
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you can correct them and that gets you closer
to improving trustworthiness.
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Second idea is to talk about organizational
trust, reputational risk, and corporate culture.
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Talk about them all together, because they
really are different ways of expressing the
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same thing.
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The importance of people believing that the
company will live up to what it promises to
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do.
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If people don't trust your organization, if
they assume your actions are not trustworthy,
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that means your reputation isn't strong and
it's at higher risk of damage, even from small
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mistakes.
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So the board or the CEO, the executive team,
when they're talking about reputation risk,
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draw that connection to corporate values and
company trustworthiness.
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Remind them that the stronger a company's
culture is and the more articulate the company
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is about its corporate values and priorities,
the more trustworthy the company will be and
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the more resilient the brand will be when
mistakes or misconduct happen, because people
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will know that, as a whole, the organization
can be trusted and that is the estate of affair
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the board and the CEO ultimately would like
to achieve.
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That's all for this episode of “What's Next
in Compliance?”
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I'm your host Matt Kelley.
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Thank you for joining me and I hope to see
you again next time.
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