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Trust in CEOs plummets and hits all-time low: Global survey

There is a crisis of public trust in business, institutions, government and non-governmental organizations (NGOs), according to a global report by public relations agency Edelman.

Agency CEO Richard Edelman said that trust had "imploded," speaking to CNBC.com by phone ahead of the publication of the 2017 Edelman Trust Barometer.

The study, released Monday to coincide with the World Economic Forum in Davos, questioned 33,000 people in 28 countries via an online survey, showed that confidence in CEOs is poor, with only 37 percent agreeing that they are credible or very credible as spokespeople, a 12-percentage point drop on 2016's figures and an all-time low since the survey began in 2001.


People are concerned about the impact of trade or automation on their jobs, said Edelman.

"How about the fact that CEO trust so collapsed this year?," he said.

"CEOs' trust has plummeted and I think it's because of compensation and because people are disappointed."

"They wanted CEOs to help fill the hole, they want more people like (Unilever CEO) Paul Polman or (outgoing Starbucks CEO) Howard Schultz. They want people who are recognizing that business has a social responsibility. I'm not talking about CSR (corporate social responsibility), I'm talking about dealing with automation or trade, what's going to happen to me (as an employee)," he added.



Communication is peer-to-peer

Employees should be more of a focus in business, the report also suggests. General staff are now seen by the public as the most trusted spokespeople to communicate industry views, innovation efforts and business practices, ahead of the CEO, senior executives and others, according to the report. Thirty-eight percent trust employees to communicate financial earnings and operational performance, versus 20 percent who trust the CEO, for example.

"Companies talk to their employees last, and that is a mistake, that's crazy. If you look at the data, the CEO is half as credible on all subjects as the employees," Edelman said. His advice to business is to "use your employees, let them know what is going on and talk to them honestly. The predominant method of communication is peer-to-peer, it's not top-down."


New media landscape

Facebook news
Source: Facebook

Meanwhile, media owned by businesses, such as their own websites and social channels, are now trusted as much as media as an institution, the survey stated. Both are trusted by 43 percent of people, however the latter saw a 3-point decline between 2012 and 2017.

The mainstream media also needs to do more to gain trust, according to Edelman, especially when it comes to stories such as BuzzFeed's publication of the unverified dossier that described "contact between Donald Trump aides and Russian operatives," and "sexual acts documented by the Russians," which were branded "fake news" by the President-elect last week who called the news site a "failing pile of garbage".

"I thought it is really proper that the (New York)Times said they put five reporters on it, we had it in June, and we couldn't find anything. I think the other media is going to have to step up and say "no" so that media is not seen as a kind of group that is tied to the elite, that it polices itself,"Edelman said.

When it comes to how people get their information, they are more likely to believe search engines (59 percent) than human editors (41 percent). And facts now matter less, with one in two survey respondents agreeing with the statement: "I would support politicians I trust to make things better for me and my family even if they exaggerated the truth."

This taps into people's propensity to share fake news stories, which saw nearly 2 million Facebook engagements in the three months leading up to the U.S. presidential election, according to BuzzFeed data.

This is a problem for brands, which are making moves to make sure they have more control over where their advertising is placed online.

Media technology company Integral Ad Science works with brands to make sure advertising appears next to appropriate content, and its EMEA marketing director, Victoria Chappell, said ensuring this happens is an "industry-wide priority."

"The recent U.S. election and the proliferation of websites dedicated to generating clickbait traffic or promoting controversial opinions has highlighted the importance of brand safety in digital advertising," she told CNBC.com by email.

Diageo, for example, works with agency partners to whitelist and blacklist certain sites and content, such as those targeting consumers under the legal drinking age, as well as avoiding keywords such as "weapons" or "drugs," its Head of Media Optimization in Europe, Cheryl Wibberley, told CNBC.com by phone.

"We are guardians of brands that have been around for several hundreds of years and that have phenomenal history of which we are very proud to be the current guardians of. For us, trust is paramount, we always need to make sure we are upholding our standards,marketing in a responsible way," she added.

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