Building trust in a climate of distrust

By Ellen Donald

From crises in sport to banking and aged care royal commissions, it’s been hard to ignore commentary on trust in Australia’s public discourse this year. It’s been all around us, somewhat all-consuming, and it’s not, at all, about to dissipate.

Not surprisingly, therefore, the concept of trust, and its fierce influence on reputation, is now being taken more seriously in Australia’s boardrooms, with the Australian Institute of Company Directors revealing that more than 80 per cent of directors are in favour of tougher penalties for corporate misconduct.

As many organisations and leaders turn their attention to how they can restore, rebuild, and strengthen trust, they also need to dissect how they can address and repair feelings of distrust, a far more damaging sentiment.

If it wasn’t before, the adage that actions speak louder than words should be ringing loudly through the corridors and boardrooms of Australian businesses, big and small.

Trust deficit

Earlier this year, while addressing world leaders at the UN General Assembly, Secretary-General Antonio Guterres highlighted what he described as a case of “trust deficit disorder” that is afflicting the world.

And, here at home, the inaugural Deloitte Trust Index – Banking 2018 found only one in five Australians believe banks act ethically, and three-quarters believe banks don’t take responsibility for their mistakes, nor keep their promises to customers.

We’ve watched that sentiment closely as it’s played out through the interim findings of the financial services royal commission. It’s fair to presume the reading will be as rough during the upcoming royal commission into aged care as it was for the Modern Slavery Inquiry’s spotlight on unlawful charities and supply chain malpractice.

It’s little wonder that Australians feel distanced and maybe even defeated by the behaviour of our (once) corporate and institutional icons.

Measuring distrust carries more weight

A landmark study by Roy Morgan published recently proposes a somewhat contrary take on measuring trust by looking at which organisations people trust, and the extent to which they trust them. Importantly, the Roy Morgan Net Trust Score (NTS) measures not only trust, but also distrust.

As Roy Morgan CEO Michele Levine points out, this is significant in that if a customer is satisfied with a firm, it doesn’t necessarily follow that they will advocate for it. An unhappy customer, however, can quickly translate into lost business – exacerbated by a growing culture of citizen journalism and easy access to social media channels.

In essence, measuring distrust offers a clearer understanding of why some companies grow, while others stagnate or decline.

Trusted organisations not immune

This year’s Roy Morgan study ranked the ABC among the highest NTS. Whether or not this changes in the wake of the recent leadership turmoil remains to be seen. The widespread public discussion generated by former CEO Michelle Guthrie’s dismissal is a reminder of the need for a risk mitigation strategy – even when trust is high.

Quick fixes may sometimes work, but more important to earning and maintaining trust is a commitment by leaders to fostering mutually-beneficial relationships that put customers ahead of profit. These factors, however, aren’t mutually exclusive.

As EY Fellow for Trust and Ethics Clare Payne puts it, “It would seem that the drive for trust is often just a thin cloak for the continued pursuit of self-interest and, more specifically, the pursuit of profit.”

Consumers demand substance from business leaders

Consumers are savvier than ever, and information – in all its forms – is ubiquitous and instantaneous.

That means organisations need to be prepared to be open in the way they engage with their customers and, indeed, all their stakeholders. It’s about demonstrating, through intent and action, that they are doing what they say. In other words, walk the talk.

It’s not necessarily easy, but it’s leadership at its most real.

Former New South Wales Premier, now NAB Chief Customer Officer Mike Baird put it best when he said reputation “arrives like a tortoise and leaves like a hare”.

Understanding what causes trust, and distrust, provides an opportunity for organisations and their leaders to start the journey of rebuilding mutually-beneficial relationships with consumers. And if slow and steady wins the race, then longer-term strategies are the key to yielding sustainable outcomes.


Guiding principles to earn, build, and maintain trust

Be action-oriented, and demonstrate a united front: Taking considered action, and being seen to do so, is crucial to earning trust. Leaders need to start where they want to finish by asking whether they’re “doing the right thing” ahead of making major operational decisions together.

Remain transparent: For people to really believe organisations are acting in a trustworthy way, they need to be kept informed. It’s in the best interest of leaders to always remain open and honest, and be authentic.

Be accountable and responsive: Leaders show up for both the good and the bad, so people know they’re genuine in living the values of the organisation. They are also quick to react and they communicate across multiple channels consistently.


If you’d like to talk to us about how building, sustaining or protecting reputation can benefit your business, please get in touch via [email protected] or 03 9993 0455.