DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - January 6, 2020 - 12:00am

Trust is fast eroding in the world today. And governments aren’t the only ones losing their people’s trust. Private business is suffering the same fate. We can see it with how people in the West and in the developing world are turning to populism as a way of showing their frustration over the state of things.

The Wall Street Journal last week published an article that called on corporations to address the trust gap. “A New Year’s Resolution for Corporations: Address the Trust” surveyed what brought the trust gap as wide as it is today. 

The trust crisis, the WSJ observed, didn’t start with Steve Jobs coming out with the iPhone, nor when Mark Zuckerberg drew out Facebook. “It has been simmering for decades.” 

WSJ reports that the Gallup organization has been polling people on trust with institutions for years. There has been a dimming view of media, politicians and clergy. The latest poll showed big business trailing the presidency, banks, criminal justice, and the church on credibility.

“Trust is more important to business success and sustainability over the long term,” Gallup said in a recent report on corporate reputation. “More than ever, integrity is the ultimate brand attribute.”

WSJ observed that “distrust worsens as people feel increasingly powerless in their dealings with business.”  

WSJ quotes a CEO: “Trust is certainly eroding. This is in large part because of what people see in their newsfeeds. Today’s politics is endlessly divisive and companies aren’t offering a clear alternative. Seldom does a day go by without hearing about a company or its leader embroiled in a controversy.”

WSJ reports that in response, “some companies have gone so far as to hire executives whose only job is to worry about trust.” Air BnB has appointed the one time chief of staff of former US attorney general Eric Holder as its vice president of trust.

I doubt if appointing a full time executive to deal with trust issues will erase the skepticism people have about corporates as insitutitions. It seems like a knee jerk response to a growing concern that will go the way of the fad about Corporate Social Responsibility or CSR.

The problem is way bigger and requires more than individual corporate responses. It is the same thing in the US and it is back in Manila. 

An interesting new book, Winners Take All, proved to be a provocative read during the holidays. Anand Giridharadas, a columnist of the New York Times, investigated how the global elite’s efforts “to change the world” preserve the status quo and obscure their role in causing the problems they later seek to resolve.”

“It is not inevitable that what passes for progress in our age involves the concentration of power into a small number of hands and the issuance of stories about the powerful being fighters for the little guy.”

This is precisely the point I have been making about how business and other institutions, including the church, have to make a conscious effort to win back the people’s trust. Big business cannot think that token efforts at so called CSR activities are enough.

During the height of the student power crisis in the late ‘60s and early ‘70s, big business were surprised that the demonstrations were attacking not just the Marcos government, but also big business as well. Their response was to put up the Philippine Business for Social Progress or PBSP.

The PBSP is still around today, but relegated to doing academic studies whose findings are supposed to help uplift the condition of our poor and marginalized. In the process, PBSP itself had been marginalized to the point of irrelevance.

Not only has the problems PBSP was supposed to address at its inception become worse today, its members are going their separate ways with their own CSR activities. The social progress that was its goal for 50 or so years remains elusive.

The negative public response to the water companies is probably undeserved. But people are ready to forget the good that the water companies delivered through the years and only remember potential instances of suspected abuses in the way water rates are determined.

The mining companies had similar credibility and trust issues when the late Gina Lopez took them on for environmental abuses. While not all mining companies are abusing the environment, the responsible ones take the blame with the irresponsible. The loss of trust was focused on an industry and only an industry wide effort to fix the damage done by the few can win back public trust.

Trust issues get easily blown up in the digital world. The tendency of many corporates to deny responsibility at the first outbreak of bad news only makes it more difficult to win back consumer trust. 

The thing is… some corporates may think they are immune to adverse trust issues by the nature of their business. But no one really is. People’s skepticism in the ways of big business is always there and it takes so little to be ignited into a major concern.

What’s to be done? I am not sure appointing a VP for trust is a cure-all solution. Indeed, every corporate officer and employee should be the VP for trust. Having a true social conscience as part of the corporate governance practices is the way to go.

Maybe the joint effort of the PSE and the SEC to go beyond the usual P and L mentality in reporting corporate performance and include sustainability is a good start. In the end, it is still better if society’s elite, particularly the business taipans, work together to help fix our many social problems. 

It can be done. San Miguel is trying to integrate social responsibility in its business model. Actually helping the grassroots to rise and partake of the benefits of our economy’s growth is the only way to go.

Trust, once broken, is difficult to win back. But an earnest effort to do just that should help ease social tensions.

Boo Chanco’s e-mail address is Follow him on Twitter @boochanco

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