Building and nurturing stakeholder trust is crucial for long-term organisational success. In today's ever-changing business landscape, trust is an essential element underpinning healthy relationships between stakeholders. Organisations must view stakeholders as partners and work collaboratively to create value for all parties involved.
To better understand how companies and boards address trust as a critical agenda item, the Deloitte Global Boardroom Program surveyed directors and C-suite executives across 30 countries and spoke with business and academic leaders and subject matter specialists. We wanted their insights on what is happening in boardrooms worldwide, where the obstacles lie, and where boards could do more to help build and nurture stakeholder trust.
The report provides insights and recommendations on how to nurture, build, and measure stakeholder trust. We found that to nurture trust, boards must go beyond merely satisfying the needs of their stakeholders and exhibit a genuine desire to understand and address their stakeholders' concerns, opinions and expectations.
Operationalising trust as a business priority
Stakeholder trust has a pervasive impact across operations. However, some areas are more critical than others. 94% of board members and top management agree that trust is essential to their organisation's performance.
Four out of five respondents say that trust directly affects their business relationships. Employee engagement and customer loyalty were a close second and third.
About two-thirds of respondents say their organisation approaches trust proactively and that trust is built into their ongoing operations. The remaining one-third of respondents report a more reactive stance: Eight out of ten say they have no consistent approach, and approximately one out of ten only prioritise trust in the wake of a crisis.
Putting trust in the board agenda
While eight out of ten respondents answer that they see the CEO as responsible for creating and maintaining trust, even more – 95% – believe that the board should be more proactive in building and protecting trust with all stakeholders.
Despite the broad recognition of their responsibility, survey results suggest that boards have more work to do to embed trust as a noticeable highlight on the agenda.
How an organisation responds to events can play a huge role in determining the level of trust stakeholders place in that organisation. Crises call on corporations to address instant challenges, but leaders should also look beyond the moment and change policies and communications that support customers, communities, and the workforce. Especially environmental, social, and governance issues (ESG), as well as climate concerns, are quickly becoming some of the problems most likely to impact corporate trust building. This trend is accelerating.
Building a solid foundation to earn and measure trust
Not only do organisations need support with measuring and quantifying trust as an essential performance indicator, but many don't try to do it all at all. This is not surprising. Measuring trust is not a core competency for most organisations. On top, around half of the respondents think the need for more clarity on the topic is a barrier.
Talking about trust: Five topic areas for board discussion
However, a few key questions can promote a relevant dialogue in the boardroom:
- How do we define trust? In a definition so that the concept can relate to all stakeholders.
- Who is responsible for trust?
- How do we measure trust?
- How do we evaluate overall the way we work with trust?
- How do we evaluate the difference in our work with ESG makes concerning our stakeholders' trust in us?
Trust is something that's earned over time. Building, nurturing and measuring stakeholder trust is more important than ever and another important topic for the board to address
Forfatter spotlight
Michael Vad
Michael comes with more than 20 years of experience as a board Advisory Partner and has specialised in board evaluation and board advisory having worked with both Danish and global companies, also on individual competence mapping and board culture assessments. Spørg mig om: Bestyrelses- og topledelsesrådgivning Michael Vad har i to årtier arbejdet med international bestyrelses- og topledelsesrådgivning for børsnoterede, familie- og kapitalfondsejede selskaber. Hos Deloitte leder Michael vores nordiske Board & Executive advisory-forretning med fokus på bestyrelsesrådgivning, CEO succession og talent management.