The Deloitte Global Boardroom Program has released the results of its latest Board Frontier Topic survey, “How boards are nurturing and measuring stakeholder trust,” which finds global business leaders understand the importance of and feel responsible for building trust within their organization. Yet, few of those surveyed categorized their organization as achieving a high level of trust maturity and around a third said they have no consistent approach to maintaining trust or only prioritize it in the wake of a crisis.
To better understand how companies—and boards, in particular—are addressing trust as a critical agenda item, the Deloitte Global Boardroom Program surveyed 177 directors and C-suite executives across 30 countries. Deloitte also spoke with business and academic leaders and subject matter specialists to get their insights on what is being done in boardrooms around the world, where the obstacles lie, and where boards could do more to help build and nurture stakeholder trust.
“For businesses, earning and protecting stakeholder trust is fundamental to ongoing viability and success, not just in terms of reputation, but as an important driver of financial performance,” says Michael Bondar, Deloitte Global Enterprise Trust Leader. “When it comes to building trust, organizations should remember two key principles: every stakeholder counts—from shareholders to employees, customers, ecosystem partners and wider society—and action is key. Trust is demonstrated by organizations performing with a high degree of competence coupled with positive intent.”
Operationalizing trust as a business priority
All respondents agreed that trust impacts performance: 94% said it’s “important” and only 6% said it’s “somewhat important” to their organization’s performance. Respondents also noted that the level of trust their organization has with stakeholders has a high impact on the following aspects of their operations: business relationships (81%); employee engagement (79%); customer loyalty (76%); financial performance (66%); and market value (60%).
However, responses varied around whether—and to what extent—formal processes are needed to build and maintain trust across the organization. Sixty-seven percent of respondents said their organization approaches trust proactively, and that trust is built into their ongoing operations. The remaining one-third of respondents reported a more reactive stance: 22% said they have no consistent approach and 8% only prioritize trust in the wake of a crisis.
Additionally, just 39% of respondents categorized their organization as achieving a high level of trust maturity, meaning they have well-defined trust objectives and metrics, take consistent actions across all parts of the organization, and regularly discuss trust in board and executive meetings. A greater number of respondents (45%) reported a moderate level of trust maturity, meaning that trust is acknowledged as a business imperative and discussed periodically at board and executive meetings, but it has yet to be enacted formally throughout the organization. Sixteen percent of respondents said their organizations have a low level of trust maturity, meaning they lack a solid definition for trust, leaders have occasional and reactive discussions, and they haven’t yet put processes in place for measuring or operationalizing trust.
The CEO—and the board—“own” the trust agenda
When assigning responsibility for managing trust, respondents feel that both CEOs and boards have a leading role to play. Eighty-two percent of respondents said the CEO is ultimately responsible for trust leadership at the company, while 95% believe the board should play a key part in building and protecting stakeholder trust.
Despite broad acknowledgement of their responsibility, survey results suggest that boards have more work to do to embed trust as a prominent feature on the agenda. Fifty-three percent said they have no fixed cadence for such discussions—being guided instead by events as they arise. Fewer than one-third (28%) of respondents said their boards put trust on the agenda twice a year or more, and 10% reported that they do not discuss trust at all as a board.
Building trust hinges on evolving stakeholder concerns
How an organization responds to events can play an outsize role in determining the level of trust stakeholders place in that organization. Crises call on corporations to address immediate challenges, but leaders also should look beyond the moment and make changes to policies and communications that support customers, communities, and the workforce.
Over the past 18 months, for example, two-thirds (67%) of respondents said overcoming COVID-19 pandemic-related challenges was the main area of focus for building stakeholder trust. But as the pandemic becomes less of a pressing concern in many regions, Environmental, Social and Governance (ESG) issues are quickly becoming some of the issues more likely to impact corporate trust building.
Deloitte’s survey shows this trend is accelerating: While 45% of respondents said ESG is a key driver of trust for their company right now, that number increases to 61% when respondents pointed to priorities over the next three years. They envision ESG and climate change becoming even more of a priority than other vital trust areas as customer experience (52%), innovation (50%), and cybersecurity (49%).
Barriers to proactive trust management and recommendations for boards
Respondents cited the following as key barriers to building or rebuilding trust: lack of clarity over which actions to take and how to measure progress (46%); lack of a designated owner of trust management (21%); and complacency (18%). At the same time, 33% of respondents believe there are no barriers to building or rebuilding trust.
When asked what actions their organization needs to take to earn trust over the next six months, respondents cited the need to perform an ongoing, consistent trust assessment (58%); develop a comprehensive definition and framework of trust in the context of the organization (45%); and include trust as a regular item on the board and management team agenda (42%).
As organizations seek to nurture and build trust among their stakeholders, the report also provides recommendations for topic areas board directors can use to foster productive conversations. These include defining trust, delineating the board’s role in trust management, measuring trust, evaluating current priorities and anticipating shifts, and evaluating the impact of ESG strategy and progress on trust.
To learn more about the results of Deloitte’s survey and find additional insights from the report, please visit: www.deloitte.com/insights/trust-management