Following are excerpts from a CNBC interview by Geoff Cutmore and Steve Sedgwick, with Richard Edelman, CEO of Edelman, from the World Economic Forum in Davos with Geoff Cutmore and Steve Sedgwick.
SS: Tell us about your trust monitor. Things are getting worse, yeah?
RE: Well it's the lowest numbers we've seen since the great recession in 2008. It's a tsunami. We actually have globalisation and automation on top of the continued tepid recovery.
SS: I understand that Richard, I understand why the Trust Monitor is so low because I see the wealth generated in the C- Suite, I see the wealth around Davos, I see the numbers about billionaires versus the poorest people in the world and people are really struggling out there despite the fact that, apparently, economies are on the up as well.
RE: Well, the big change in the barometer this year is that there is now loss of faith in the system. More than half the people do not believe they are going to have a better future, that they have good leaders, that they actually have a good chance economically and the fears are both societal and economic – they going to be replaced by machines.
GC: But what about the business leaders? Are we not seeing CEO's at least improve their ratings as they begin to grapple with some of the challenges around investing back in businesses? I mean growth is coming back – aren't CEO's investing and isn't being reflected in improved ratings?
RE: Sadly not, trust in CEO's plummeted this year. We're back to the level of 2009, CEO's are hardly more trusted than government leaders – not a great place to be.
GC: Why is that?
RE: People are disappointed. They're disappointed they're taking too much money, they're also disappointed that societal factors, issues are not really being dealt with by CEO's.
SS: Are CEO's running companies for investors or are they running it for their staff? In the mantra, it should be doing what's best for shareholder value but I can't help thinking that's just gone too far with the buybacks, with the dividends. Maybe they need to start investing in their employees a bit more.
RE: The best play is for CEO's to do inside out. Focus on their employees. The number one way to get trust back is to pay your employees well and get them to speak well about the company. The world has flipped upside down. It used to be a pyramid of authority, now it's upside-down. The influence actually rests with the mid-level people, who speak peer-to-peer. If they're for you, you win.
GC: Just on this issues of communication as well, you talked about the fake news problem. Isn't it about time that we started making some of these technology companies confess to being media companies and then they will have to adhere to the same rules and regulations that media businesses do i.e they will have to step in and behave as proper gatekeeper to information being disseminated to the wider public?
RE: The biggest drop in institutional trust this year was in the media. The media has become as an echo-chamber. People only see or hear what they want to and four times as many people say I just will read and hear what I believe in. So we absolutely have to get the media on side in making sure that which people see is going to add to democracy and to value.
GC: But when we talk about the media, there are the traditional media like, I guess, TV networks like ours or newspapers. They have been less willing I think to republish untruths than say those internet platforms that do not filter the information.
RE: People actually prefer search to human editors. They actually believe that it's unvarnished, they look at the media as part of the elite and that's a bad place to be. The media has to go local and go social.
SS: Let me ask you a question about Trump as well and one of the points you've raised is that companies are going to start to imitate Trump. Can you flesh that out a bit Richard, what does that mean?
RE: Well not politically, but they're going to start going direct. I think that the idea somehow of being authentic, genuine, speedy, somehow of the people is really important and I don't think that CEO's should necessarily be the chief Tweeters, it actually could be the people doing the work and using the products.
GC: What does that mean for agencies that traditionally sat in the middle?
RE: We like it because we're going to help companies in the sense, become their own media companies. For ad agencies, that's another thing.
SS: Would you ever encourage a company to take Mr Trump on on Twitter?
RE: I think if you have to tell the facts, you have to speak truth to power and you cannot stand back and sit back. Now is the time for leaders to stand up.