Trust underpins reputation to the extent that someone who buys a product or service on the basis of an organisation's reputation is said to have entered in to a "trust contract".
Trust is not just a nice warm feeling; it has very clear implications for those who have it, and for those who don't. The Trust Barometer results show that 54 per cent of New Zealanders refused to buy products or services from companies they distrusted, while 59 per cent were willing to recommend trusted companies to a friend or colleague.
Thought-provokingly for media companies, the most trusted media source is online search engines. Today, if Google says it, it must be right - right?
We tend to trust non-governmental organisations (NGOs) most (54 per cent); business next (51 per cent); government a lot less (only 41 per cent) and media a distant last (38 per cent - way down from 47 per cent in 2015).
The Colmar Brunton/Wright survey assesses companies using four "pillars": leadership/success, fairness, responsibility, and trust.
The trust criterion is about more than trustworthiness - it also includes perceptions of companies having a positive influence on society and being seen as "honest and ethical in the way they conduct business".
All reports show that trust and reputation are much more than a simple measure of likeability, and "soft" aspects of reputation (including trust) are becoming more important.
One indicator of this trend shows up in the Edelman Trust Barometer: 72 per cent of those surveyed wanted chief executives to be more visible in discussing financial results but, tellingly, 80 per cent wanted CEOs also to be personally involved in discussing societal issues such as income inequality and other issues.
They should, respondents said, make clear their personal views on societal issues.
That's tricky territory for organisational leaders more comfortable with numbers than policy nuances - and this is where PR counsel can have a role.
A key PR function is to help executive teams to take the temperature of stakeholder opinions and, if need be, to advise on how to close gaps between how the organisation wants to be seen and how it is perceived.
But both PR and the profession's clients and employers need to revise outdated ideas about reputation. One such idea is "reputational capital": the notion that if you're seen to be doing good long enough by the right people, you'll build up a "goodwill bank" to draw on in times of crisis.
There's an element of truth here: research indicates that if you have a good reputation before a crisis, when one hits, customers are more likely to give you the benefit of the doubt. But reputation is not static, like money in the bank. It's dynamic, changing as stakeholders access new information, and can be damaged in seconds.
Perhaps one idea businesses could consider is that of "reputable action". Advanced by scholars at the London School of Economics, it's the notion that what counts is a sustained performance that stakeholders see as deserving of trust.
There's support for this position in all the local reputation reports. But given big gaps between business recognising the importance of reputation and taking steps to address it, will they spur fresh action?
- Dr Chris Galloway is head of public relations at the Massey University Business School.
- Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz.
