trust book final 2

8/14/2019 Trust Book Final 2

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2009 Edelman Trust Barometer


2/242009EDELMAN TRUST BAROMETER

About the Edelman Trust Barometer The 2009 Edelman Trust Barometer is the rms 10th study o trust andcredibility. A 30-minute telephone survey was conducted among 4,475 peoplein 20 countries on ve continents between November 5 and December 14,2008, ollowing the presidential election in the United States. For the rst time,the survey sampled two dierent age groups concurrently in every country (1,075people ages 25 to 34 and 3,400 people ages 35 to 64) and added Australia andIndonesia to the list o countries surveyed.

The inormed publics interviewed in the 2009 survey:

are college-educated; report a household income in the top quartile o their country (per age group); report signicant media consumption and engagement in business news

and public policy.

Margin o ErrorFor the 35-to-64 age group, margin o error is 1.7% globally;4.9% or the U.S. sample; 5.7% or the China sample; and 8.0% orother countries in the study. For the 25-to-34 age group, margin o error is3.0% globally; 9.8% or the U.S. sample; 11.3% or the China sample;and 13.9% or other countries in the study.

DisclosureAt the time the 2009 Trust Barometer was compiled, Edelman had aclient relationship with the ollowing companies or brands mentioned in thisbrochure: Wal-Mart, Starbucks, and Johnson & Johnson.

For more inormation on the Edelman Trust Barometer and to view pastresults, please visit www.edelman.com/trust.

The 2009 Edelman Trust Barometer was conducted by Edelmans researchrm, StrategyOne.

About EdelmanEdelman is the worlds largest independent public relations rm, with 3,200employees in 53 oces worldwide. Edelman was named Large Agency othe Year in 2008 by PRWeekand a top-10 rm in theAdvertising Age 2007Agency A-List, the rst and only PR rm to receive this recognition. CEORichard Edelman was honored as 2007 Agency Executive o the Year by both

Advertising Age and PRWeek. PRWeekalso named Edelman Large Agencyo the Year in 2006 and awarded the rm its Editors Choice distinction. Formore inormation, visit http://www.edelman.com.

On the cover, rom top let: A armer rom Yunnan province cries over her baby, oneo thousands sickened by milk products that manuacturers in China adulterated withmelamine; the Royal Bank o Scotland, which was bailed out by the British governmentater a near-collapse in late 2008; a house in oreclosure, a symbol o the subprime mort-gage crisis in the United States that sparked the countrys recession; an electronic signcaptures the sharp decline in the value o NASDAQ stock on Tuesday, Jan. 22, 2008,when the Dow Jones industrials dropped more than 150 points; Richard S. Fuld Jr.,ormer CEO o Lehman Brothers, the American brokerage house that led orbankruptcy in September 2008; demonstrators in Reykjavik, Iceland, which suered acomplete nancial meltdown in 2008.


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Businesss Fall From Grace: Where to From Here?

The State o Trust: A Global Divide

Who Can We Trust?

A Call or Government Intervention

The Business Case or Trust

Public Engagement: The Road to Rebuilding Trust

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4

12

15

18

20

Thousands o demonstrators crowd a square in Reykjavik, Iceland, in December 2008 to protest the countrys economic collapse and demand

the resignation o leaders thought to be responsible. The global credit crunch o 2008 brought down the countrys three main banks, devalued

the countrys currency, and orced Iceland to seek billions o dollars in aid rom international sources.

TABLE OF CONTENTS



Businesss Fall From Grace: Where to From Here?

We have never had a more dramatic backdrop against which to relay the ndings o the annual

Edelman Trust Barometer than we have or our 10th edition, conducted in 20 countries on ve

continents just ater the presidential election in the United States.

Business has had a disastrous year,

well beyond the evident destruction

in shareholder value and the need

or emergency government unding.

Whereas the problems o corporate

trust were limited largely to New

Economy enterprises like Enron

and Global Crossing in 2001-2003,

companies at the center o the global

economy are in serious trouble

in 2008-2009. And in a urther blowto corporate authority, condence in

CEOs as a reliable source o inor-

mation about their companies has

hit a new low globally.

When asked whether they trusted

corporations more or less than a

year ago, more than one-hal o our

respondents said they trusted them

less (gure 1). While our survey did

not ask why they had lost trust in

companies, a series o catastrophic

events that included the all o the Big

Three automakers and the national-

ization o the Royal Bank o Scotland

provide ample explanation.

The most proound all rom grace

or business has been in the United

States, where trust had been grow-ing ater the 2002 Enron scandal. In

the home o capitalism, American

trust in business to do what is right is

now most comparable to that o the

countries o old Europe where trust

levels have always been lower. Trust

in business, generally credited with

improved standards o living, still holds

up in the BRIC countries as well as in

0

10

20

30

40

50

60

70

80

90

100

73%

69% 6 7% 67 % 67% 66%

56% 55% 54%50% 4 9% 49 %

32%

21%

62% 61%62%

Glob

al

83%

Irelan

d

79%

Japan

77%

U.S.

74%

Australia

Germany

S.Ko

rea

U.K.

France

Sp

ain

Canad

aItaly

Nethe

rlands

China

Swede

n

Polan

d

Mexico

Russia

India

Indonesia

Brazil

Inormed publics ages 25 to 64 in 20 countries

Thinking about everything you have read, seen, or heard about business in the last year, in general, do you trust corporations

a lot less, a little less, the same, a little more, or a lot more than you did at the same t ime last year?

Figure 1: Companies less trusted now than a year ago

% who trust companies less

Japan, Korea, Mexico, and Indonesia.

In the developing countries among

this group, living standards are still

much higher than ever beore and, in

Asia and Latin America, government

has always played a more activist role

in the economy. It appears that the

world is moving toward a consensus

on a modied ree market approach in

which government is more involved in

the private sector.

Being a public company means

something dierent now than it did

when Milton Friedman claimed in

1970 that the social responsibility

o business is to increase its prots.

Some our decades later, weve

moved rom a shareholder to a stake-

holder world in which business must


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Inormed publics ages 35 to 64 in the U.S.; Responses 6-9 only on 1-9 scale; 9 = highest

How much do you trust business to do what is right?

Figure 2: Trust is key in rebuilding investor condence

10

20

30

40

50

60

70

Sep01

Dec01

Mar02

Jun02

Sep02

Dec02

Mar03

Jun03

Sep03

Dec03

Mar04

Jun04

Sep04

Dec04

Mar05

Jun05

Sep05

Dec05

Mar06

Jun06

Sep06

Dec06

Mar07

Jun07

Sep07

Dec07

Mar08

Jun08

Sep08

Dec08

S&P 500: Sep 2001 Dec 2008

Trust in U.S. business in generalEnron, the dot-com bust,

and September 11

0

200

400

600

800

1000

1200

1400

1600

1800

recast its role to act in the publics

interest as well as or private gain.

The global support or more govern-

ment regulation evidenced in this

years Barometer is not a call or

business to abdicate its responsibilityto tackle the big issues o our

time. A majority o respondents said

that business must partner with

governments and advocacy groups

to solve the worlds pressing problems,

among them the inancial crisis,

global warming, energy costs, and

aordable health care. Business

must make undamental changes i it

is to regain the license to operate.

We believe in the potential o PublicEngagement, which combines reas-

sessment o corporate policy and

continuous communication. There are

our elements in Public Engagement:

Public Sector Diplomacy, in which

business works in cooperation with

NGOs and government to address

major global issues; Mutual Social

Responsibility, a combination o

cause-related marketing and corporate

social responsibility; Shared Sacrice

in the ace o the global recession

through equitable compensation; and

Continuous Conversation with stake-

holders, characterized by agility,

timeliness, and contributionnotcontrolo message.

The rebuilding o trust will not happen

overnight; it will go hand-in-hand with a

recovery in the economy and a rise in

share prices. Historically, weve seen

that trust is key to restoring investor

condence (gure 2). Rebuilding trust

requires business to think and

communicate dierently, to partner

with government and NGOs, to be

transparent by speaking publiclyabout goals, and then to document

successes or ailures. It is time or

business to suit up, take the eld, and

go on oense or the second hal o the

game. Im optimistic that business has

the ability to regain its mandate to lead.

Richard Edelman

President and CEO, Edelman

Business must make

undamental changesi it is to regain the

license to operate.

BUSINESSS FALL FROM GRACE: WHERE TO FROM HERE?



The State o Trust: A Global DivideA countrys economic position and its prospects or growth emerge more strongly than ever

as actors in this years Trust Barometer. Although not a stark dividing line, inormed publics in

emerging economies and developed markets reveal telling dierences in their levels o trust in

institutions, industries, and a companys headquartered country.

Trust in business is

country-specic

Around the world, inormed publics

are less trusting o corporations to

do what is right than they were a

year ago. But when asked about

their trust in business in general,

respondents in individual countriesreveal a wider spectrum o trust

(gure 3).

In the United States, home to some

o the largest corporate collapses,

trust in business collapsed as well,

dropping 20 percentage points over

the course o one year. With only

38% o inormed publics in the United

States trusting business today, levels

are the lowest they have been in the

Barometers tracking historyeven

lower than in the wake o Enron and

the dot-com bust (gure 4, page 5).

For U.S. businesses, this down-

turn marks a stark reversal rom

the steady uptick in trust o the last

ve years and a new parity with

Western Europe, which historically

shows the lowest trust levels in

business among all nations surveyed.

Perhaps more important, this portends

a movement away rom the laissez-

aire era where capitalism was

king and the business o business

was business.

Over the past seven years o Baro-

meter research, trust in business

among Europeans has been gauged

as relatively stable, with overall trust

scores in the 30%-to-40% range.

(Trust in government has been much

more volatile, shiting up or down

with political and economic changes.)

With these traditionally low levels otrust in business, Europe did not have

ar to all this year and, or the most

part, trust remained steady and low;

trust in business dropped in Italy,

Spain, and Ireland. The social model

economies o the Netherlands and

Sweden are the exceptions to the rule,

as both recorded a slight increase o

trust in business (gure 5, page 5).

0

10

20

30

40

50

60

70

80

90

100

Global

U.S

.Ital

yMe

xico

Spain Ind

iaIre

land

Canad

a

Germ

anyFra

nce U.K.

Polan

dJap

an

S.Ko

reaRu

ssia

Nethe

rland

sBra

zil

Swede

nChina

Australia

Indonesi

a

51%49%

58%

38%41%

27%

75%

65%

49%

40%

74%

65%

47%

41%

49%

45%

35%33%

30% 29%

45%45% 45%47%

61%63%

43%45% 42% 45%

55%

62% 61%

69%

39%

51%54%

71%

39%

68%

Trust down Trust steady Trust up New

additions

in 2009

2008 2009Inormed publics ages 35 to 64; Global total: 18 countries (excludes Australia and Indonesia)Responses 6-9 only on 1-9 scale; 9 = highest


Figure 3: Trust in business is country-specic

% who trust business to do what is right


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Inormed publics ages 35 to 64 in the U.S. and U.K./France/Germany

Responses 6-9 only on 1-9 scale; 9 = highest

Figure 4: In U.S., trust in business at lowest level, including post-Enron;

Now on par with U.K./France/Germany

30

35

40

45

50

55

60

44% 44%

48%

51%

48%

49%

53%

58%

38%

20-pointdrop

U.K./France/Germany

United States

32%

41%40%

36%38%

35%

34%

36% 36%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Enron, the dot-com bust,and September 11


THE STATE OF TRUST: A GLOBAL DIVIDE

0

10

20

30

40

50

60

70

80

90

100

Italy

Spain

Irelan

d

Germ

any

France

U.K.

Nethe

rland

s

Sweden

Russia

Polan

d

Powerhouse economies:trust steady but low

Moderate economies:trust declines

Social modelgovernments:

trust rises

Central/EasternEurope

economies:trust steady,relatively low

2008 2009

41%

27%

49%

40%

47%

41%

35%33%

30%29%

45%45%

55%

62%

39%

51%

45%47%42%

45%

-14

-9 -6

+7+12

Inormed publics ages 35 to 64



Figure 5: In Europe, trust in business relatively low except in

Netherlands and Sweden

With traditionally

low levels o trust

in business, Europedid not have ar

to all this year.

Nick Burns, ormer U.S. under-secretary o state, proessor at

Harvard Universitys KennedySchool o Government, and acounselor to Edelman

A QUESTION FOR...

Q:How will the higher levels obusiness and government trust inemerging economies aect thenegotiations at orums like the G-20global nancial talks, the Doharound o trade talks, and the UNclimate summit in Copenhagen?

A:We are in the midst o a majorstrategic shit in world politics andeconomicsthe rise to power oChina, India, Brazil, and others.Business and government leadersin the United States and otherWestern nations will need to buildtrusting relationships with theircounterparts rom these risingcountries to achieve eectiveresults. China and India, in par-ticular, will be lead players at theG-20 nancial talks, at Doha,and at the climate summit.

West-East Shit



short-lived. Our survey shows that

79% o Japanese, 56% o Chinese,

and 49% o Indian inormed publics

say they now have growing concerns

about business. In the wake o the

Satyam scandalwhich broke ater

we conducted the surveythis ore-casted decline in trust may well have

been realized.

Globally, younger and older

inormed publics now trust

business equally

Last years edition o the Trust Baro-

meter marked the irst time that

the survey studied young inormed

publics (ages 25 to 34). The results

showed that many younger people,

historically cynical about business,

tended to trust it more than their

older counterparts (ages 35 to 64) in

many regions o the globe.

This year, the younger cohorts more

trusting attitude has just about

vanished, and their trust in business

mirrors that o the older group.

In emerging economies, trust in

business remains high

The Wests skepticism about busi-

ness stands in contrast to Asia Pacic

and Latin America, where trust in

business remains strong. In emergingeconomies, even where trust ell, it

remained much higher than levels

recorded throughout much o the

rest o the world (gure 6, page 7).

Signicantly, in China, the trust-in-

business score rose rom 54% last

year to 71% this year, and in Brazil

it rose rom 61% to 69%. Overall

trust levels were high in Japan, India,

and Indonesia, a country new to this

years Barometer.

The incongruity may well be attributed

to the act that people in emerging

economies traditionally credit business

with having introduced an improved

standard o livingthus the higher

levels o trust.

A closer look at the data, however,

indicates that this advantage may be

The Trust Divide

Trust in business 50%among 25-to-64-year-olds

Antonio Martins de la Cruz, oreign aairs minister o

Portugal rom 2002 to 2004,and a counselor to Edelman

A QUESTION FOR...

Q:What should leading Europeannations do to rebuild trust?

A:The perception o thecurrent crisis in the EU stems

rom a lack o condence in thenancial system, exacerbatedby the eeling that government

is not providing adequateanswers to the problem. Onlywith transparent policies will it

be possible or government toregain the condence o theEuropean public. Transparency,

solidarity between governmentand business, and the ability ogovernment to anticipate similar

problems are essential tostabilize the situation.

A Crisis in Confdence


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Global China Brazil Mexico India Indonesia

0

10

20

30

40

50

60

70

80

90

100

51% 49%54%

71%

61%

69%

75%

65%

74%

65%68%

2008

N/A

High and heading higher Falling but still high Debuts high

2008 2009Inormed publics ages 35 to 64Responses 6-9 only on 1-9 scale; 9 = highest


Figure 6: In emerging economies, trust in business remains high

How much do you trust government to do what is right?

Figure 7: Trust in government did not rise to oset lower trust in business

0

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20

30

40

50

60

70

80

90

100

Global

Swede

nU.S

.

Mexic

oInd

iaSp

ain

S.Ko

reaIre

land

Japan

France Ch

ina Italy

Russi

aU.K

.

Germ

any

Nethe

rlands

Canad

aPo

land

Brazil

Indonesi

a

Australia

Trust down Trust steady Trust up New

additions

in 2009

43%44%

63%

39% 39%

30%

49%

41%

49%

43%

37%34%

40%38%

35%35%

45%45%

35%36%

79%80%

29%32%

38%

43%

34%

41%

27%

35%

64%

74%

39%

51%

11%

33%

22%

51% 52% 53%

2008 2009Inormed publics ages 35 to 64 in 20 countries; Global total: 18 countries (excludes Australia and Indonesia)Responses 6-9 only on 1-9 scale; 9 = highest


Although disparities exist in the

growing economies o Russia (70%

o 25-to-34-year-olds trust business

vs. 45% o 35-to-64-year-olds),

Mexico (78% vs. 65%), and India

(78% vs. 65%), or the most part,

younger and older respondents nowtrust business equally.

Large drops in trust in business

among the younger group occurred

in France (52% to 32%), the United

States (60% to 32%), and South

Korea (52% to 32%), refecting the

overall lower levels o trust in busi-

ness in these established economies.

Lower trust in business is not

governments gain

Conventional wisdom holds that when

trust in one institution alls, another

will experience the beneit o an

increase in trust. This years ndings

disproved that notion. Overall, trust

in government did not rise to oset a

loss or business (gure 7).



health care, human rightsleading

to increased levels o trust among

inormed publics that these organi-

zations will do what is right.

Swedish, German, and Canadian

companies retain top trusted spot

In an economy where the majority

o corporations are now multi-

nationals, an important question

emerges: Which countrys companies

command the most trust?

The most trusted companies are

headquartered in Sweden, Germany,

and Canada (igure 9, page 9).

These three countries have held the

most trusted spot or the past threeyears o Trust Barometer surveys.

As they have in previous years,

American companies continue to

suer rom a trust discount in Western

Europe. The United States is the only

Western nation whose identity causes

such an eect on its brands. Ameri-

can companies rank 25 to 30 points

Global Total North America Latin America Europe Asia Pacific

0

10

20

30

40

50

60

70

80

90

100

Media GovernmentNGOs Business

54%50%

47%45%

68% 67%

58%

46%

57%

42% 40% 40%

52%

61% 61%

56%

45%39%

32% 32%



How much do you trust each institution to do what is right?

Figure 8: NGOs most trusted institution in every region except Asia Pacic

Business is still more trusted than

government in 13 o the 20 markets

we surveyed. Respondents trust

government more than business only

in Germany, Canada, Italy, France,

the Netherlands, Australia, and

China. Given the pervasive rolethe Chinese government plays in

the countrys everyday lie, its not

surprising that 80% o respondents

trust government to do what is right.

Trust in government remained steady

or declined in 12 o the 20 countries

surveyed, with the largest drops in

Sweden (63% to 39%) and the United

States (39% to 30%). Trust in govern-

ment rose in eight countries, with the

largest gains in the emerging econo-mies o Poland (11% to 33%) and Brazil

(22% to 51%). Gauged or the irst

time this year, trust in government in

Indonesia and Australia is at mid-point

levels o 52% and 53%, respectively.

NGOs remain highly trusted in

every region, except Asia Pacic

O the our institutions tracked by the

Trust Barometer, NGOs command the

most trust. In every region except AsiaPacic, they are trusted more than

business, government, and media

(gure 8). Around the world, NGOs

are the only institution trusted by

more than 50% o inormed publics.

Although NGOs earned ourth place

among trusted institutions in the Asia

Pacic markets, its important to note

that growth in the non-governmental

sector has been strong and steady

over the past ew years in this region.For example, trust in NGOs among

Barometer respondents in China was

31% in 2004 and 36% in 2005 and

jumped to 60% in 2006, fattening

out to 53% by 2009. The increasing

aluence o these markets has

brought about increased aware-

ness o the kinds o issues that

NGOs take onthe environment,

lower in Europe than they do in the

United States, and they badly trail

German, Swedish, and Canadian

companies in being trusted. Only

in China do American companies

remain in the highest rank, more

highly regarded by the Chinese (ata 75% level o trust) than they are

by Americans themselves (62% o

whom trust U.S.-based companies).

Interestingly, while Barometer resp-

ondents in China assert the highest

trust in business in the world,

Chinese businesses are among the

least-trusted companies globally.

Companies headquartered in Russia

share an equally low share o trust

around the world (24%).

With this data in hand, the implica-

tions o the cross-national sale o

a brand such as Volvowhich has

roots in Sweden, is now owned

by Americas Ford, and is being

shopped to a buyer in Chinanow

seem much greater than what once

met the eye.


11/24

Technology

Biotech/life sciences

Health care industry

Automotive

CPG manufacturers

Energy

Retail

Food

Pharmaceuticals

Entertainment

Banks

Media companies

Insurance

76%77%

66%

65%

57%

61%

57%

62%

55%

55%

55%

57%

55%

55%

59%

53%

56%

50%

53%

45%

56%

42%

46%

40%

45%

2008 N/A

2008 2009

How much do you trust businesses in each o the ollowing industries to do

what is right?

Figure 10: Technology remains most trusted industry sector globally




Swedish Finance Minister Anders Borg is

battling a severe economic downturn and

protectionist measures that could threaten

a European-wide economic recovery.

Known or consensus-building, Borg drew

attention or saying that its very important

to point out that we are trying to solve a

crisis and that [means] doing what is right,

not being nice to banks. Notwithstanding

the countrys scal woes, trust in business

to do what is right rose in Sweden by 12

pointsand or the third straight year,

companies based in Sweden top the list

o most trusted businesses.

0

10

20

30

40

50

60

70

80

90

100

76%73% 74% 72%

74%71% 71%

68% 68%65%

62%60% 60%

53%

59%

52%54%

50%53%

43%

36%32%

28%24%

26%24%

Sweden

Germ

any

Canada U.

K.

Nethe

rlands

France

Irelan

dU.

S.Sp

ain Italy

Polan

dChina

Russia

2008 2009Inormed publics ages 35 to 64 in 18 countries


How much do you trust global companies headquartered in the ollowing

countries to do what is right?

Figure 9: Companies headquartered in Sweden, Germany, and Canadaremain most trusted; companies in China and Russia trusted the least



banking and automotivesuered the

greatest declines. Trust in banks was

nearly cut in halalling rom 69%

to 36%while the automotive industry

experienced a 27-point plunge

(gure 11).

Viewed together, the U.K., France, and

Germany demonstrated a similar

drop in major industries, with banks

(41% to 27%), energy (44% to 39%),

and media companies (35% to 28%)

all taking a hit (gure 12, page 11).

Yet in several emerging economies,

the industries that are suering in the

West, such as banking and automo-

tive, remain trusted or have made gains

over the past year (gure 13, page 11). Trust in banks rose by 7 points in

Brazil; trust in media companies rose

by 10 points in India. In China, trust

in banks, automotive, energy, and

media all increased in the last year,

again demonstrating how dierent

this growing economic powerhouse

is rom the major Western markets.

Trust in nearly every industry

alls; technology remains

most trusted

Just as levels o trust in business di-

er among countries, a global divide

between developed and emerging

economies also appears to hold or

inormed publics trust in industries.

Around the world, technology remains

the single most trusted industry

sector, with 76% o respondents

telling us that they trust this sector

to do what is right, ollowed by

biotechnology and lie sciences. The

least trusted industries are media

and insurance companies; just 40%

o respondents trust insurancecompaniesa ve-point decline rom

the year beore (gure 10, page 9).

In the United States, virtually no

major industry was spared the

erosion o inormed publics trust.

Not surprisingly, the two industries

seeking government bailouts

0

10

20

30

40

50

60

70

80

90

100

69%

36%

60%

33%

44%

25%

49%

31%

50%

33%

58%

42%

64%

49%54%

40%

54%

42%

73%

62% 63%

54%

80%

73%

Banks

Autom

otive

Media

comp

anies

Insura

nce

Entert

ainme

nt

Health

careind

ustry

Retail

Energy

Biotec

h/life

scienc

es

Pharm

a

CPGm

anufac

turers

Techn

ology

-27-33

2008 2009

How much do you trust businesses in each o the ollowing industries to do what

is right?

Figure 11: In U.S., trust in every industry declines

Inormed publics ages 35 to 64 in the United States


In the United States,

virtually no major

industry was spared

the erosion o inormed

publics trust.

Bob Shrum, senior ellow atNew York Universitys Wagner

School o Public Service,prominent consultant to theU.S. Democratic Party, anda counselor to Edelman

A QUESTION FOR...

Q:Does the Obamaadministration have the

tools to orge a recovery?

A:President Obama is readyto listen and move beyond the

politics o one-sided solutions,

and business has to be open

too. Business can help make the

inevitable increase in nancialregulation more eective and

eicient. It can help make

progress on trade agreements

by not rejecting reasonable

worker and environmental stan-

dards. And clean technologies

can create whole new markets

or energy companies.

Obama and Business


13/24

0

10

20

30

40

50

60

70

80

90

100

Automotive Energy Banks Media companies

52%49%

44%39%

41%

27%

35%

28%

2008 2009

How much do you trust businesses in each o the ollowing industries to do

what is right?

Figure 12: In the U.K., France, and Germany, trust in automotive, energy,

banks, and media companies declines

Inormed publics ages 35 to 64 in the U.K., France, Germany


How much do you trust businesses in each o the ollowing industries to do what is right?

Figure 13: In emerging economies, industries that suer in the West remain trusted

China India Brazil

Autom

otive

Energ

yBa

nks

Media

comp

anies

Banks

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

72% 72% 72%

55%

Autom

otive

Energ

yBa

nks

Media

comp

anies

79% 81%

72% 71%

83% 81%

55%

65%

52%

59%

2008 2009

84%83%80%

67%




David K.P. Li, chairman andchie executive, Bank o East Asia,

and a counselor to Edelman

A QUESTION FOR...

Q:Trust in business andgovernment is slightly down inAsia Pacic, but both are aringbetter than their U.S. andWestern Europe counterparts.How should business andgovernment work together inthese turbulent economic times?

A:The current economic crisishas given rise to doubts about theuture o Western models o ree

enterprise. The model, however,is strong; the crisis rearms thatno economy, not even the worldslargest, can continue to livebeyond its means. Firms basedin Asia have signicant globalopportunities as orward-lookinggovernments continue to encour-age the development o reemarkets and prudent risk-taking.

From Excess to Prudence



Who Can We Trust?

Mirroring the erosion o trust in business this year, trust in every type o source o inormation about

companies and o every type o spokesperson is down in most markets around the world.

These lower levels o credibility suggest that business must engage with its audiencesthrough multiple voices on multiple channels, especially since inormed publics say they need

to hear inormation several times beore they will believe it.

Credibility o traditional

sources o inormation wanes

The credibility o all inormation

sources has declined strongly in

most markets among 35-to-64-

year-olds in our 18-country trackingaudience (igure 14). Even the

credibility o business magazines

and stock or industry analyst

reportstraditionally the most

trusted sourceshas dropped,

rom 57% to 44% and rom 56% to

47%, respectively.

There is particular erosion in trust

in television and radio as credible

sources o news about companies.

The credibility o television news

coverage declined rom 49% to 36%,

and the credibility o newspaper

articles ell rom 47% to 34%.

In several countries, some notable

shits have occurred. In China, tele-

vision news coverage, which last

year was the most credible source

at 70% (by respondents ages 25 to

64), is now considered credible by

just 47% o the same group and is

slightly less credible than conversa-

tions with riends and peers (49%).

In the United States, where analyst

reports and articles in business

magazines earn the highest, and

equal, levels o credibility (46%)

among respondents ages 25 to

64, conversations with company

employees (40%) are more credible

than most traditional sources like

articles in newspapers (30%) and

news coverage on the radio (29%).

Around the world, conversations with

company employees and conver-

sations with riends and peers are

Stock or industry analyst reports

Articles in business magazines

Conversations with yourfriends and peers

Conversations with

company employees

News coverage on the radio

Television news coverage

Internet search engines such asGoogle News or Yahoo! News

Articles in newspapers

Free content sources such asWikipedia or Web portals

Live communication such asa CEO speech

Corporate communications such aspress releases, reports and e-mails

A companys own Web site

Business blogs

Personal or non-businessblogs or bulletin boards

Social networking sites such asMySpace or Facebook

Corporate or product advertising

47%

56%

44%

57%

40%

40%

49%

38%

49%

36%

35%

49%

34%

47%

26%

38%

24%

19%

16%

31%

15%

20%

13%

20%

27%

27%

38%

2008 N/A

2008 N/A

2008 N/A

2008 N/A

2008 N/A

2008 2009

How credible is each o the ollowing as a source o inormation about a company?

Figure 14: Credibility o sources o inormation about a company declines


Extremely credible and very credible responses only

considered nearly equally credible by

all age groups surveyed, and or

the most part are on par with more

traditional sources like newspapers,

TV, and radio, signaling the growing

inluence o word-o-mouth as a

source o inormation about companies.


15/24

0

10

20

30

40

50

60

70

80

90

100

An academicor expert on

that companysindustry or issues*

Financial orindustryanalyst

A personlike you

Non-profitorganization

or NGOrepresentative

Regularemployee

of acompany

CEO ofcompany

Governmentofficial orregulator

56%59% 57%

47%

58%

47%49%

38% 39%

30%

36%

29%32%

27%

2008 2009

I you heard inormation about a company rom each o these people, how credible

would it be?

Figure 15: Trust in nearly every spokesperson down; academics, industry

experts most credible

*Asked as an academic in 2008



Experts are most credible

spokespeople or a company;

CEO credibility hits new low

The credibility o nearly every

spokesperson is down around the

world. Specialists remain the most

credible purveyors o inormation

about a company, with 59% o

respondents ages 35 to 64 saying

an academic or an expert on a com-

panys industry or issues would be

extremely or very credible (gure 15).

Peers remain a credible source o

inormation about a company. A

person like yoursel is as credible

as an industry analyst, with 47% o

respondents saying they nd theinormation they receive rom a peer

to be extremely or very credible, and

30% saying they nd the inormation

rom a regular company employee to

be extremely or very credible. Only

27% consider inormation rom a

government ocial or regulator as

extremely or very credible.

Since 2003, the Edelman Trust Baro-

meter has tracked the credibility

o CEOs as spokespeople or acompany, adding new markets

each year. This year, in 18 o the

20 markets surveyed, only 29% o

respondents ages 35 to 64 view

inormation rom a CEO as credible.

In the United States, which has

seen a revolving door o high prole

CEOs, the credibility o inormation

rom a companys top leader sits

at a six-year low, at 17%, among

35-to-64-year-olds. New lows also

were reached in Italy, South Korea,

and the U.K./France/Germany, among

others, as well as in the emerging

economies o Mexico and Brazil,

where business is overall more highly

trusted (gure 16).



I you received inormation about a company rom a CEO, how credible would it be?

Figure 16: CEO credibility hits new low in several countries

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009

U.S. U.K./ France/Germany

Canada Mex ico

Italy Spain

Ireland Poland

South KoreaBrazil

WHO CAN WE TRUST?



The relatively low levels o trust

in CEOs as spokespeople should

not be interpreted as an excuse

or top business leaders to go silent,

as they did in 2003-2005 in the

wake o the Enron, Worldcom, and

Parmalat scandals. CEO commu-nications should be supported by

other channels, especially employees,

who are trusted ambassadors or

company inormation.

Trust in digital channels also

alls, but infuence is still elt

Trust in digital media sources or news

about companies ollowed the down-

ward trend or all media, with ree

content sources (such as Wikipediaand Web portals) and social

networking sites (such as MySpace

and Facebook) losing ground,

dropping globally among 35-to-64-

year-olds rom 38% to 27%, and

20% to 15%, respectively.

For the rst time, this years Barom-

eter asked respondents about their

trust in Internet search engines (such

as Google News and Yahoo! News),

business blogs, personal or non-

business blogs, or bulletin boards

as sources o company inormation.

Among 35-to-64-year-olds, search

engines emerged as most trusted

o all digital channels (35%), with

markedly lower levels o trust orbusiness (19%) and non-business

(16%) blogs.

One notable exception is South

Korea, where 25-to-64-year-olds

view social networking sites (45%)

and personal or non-business blogs

or bulletin boards (46%) as credible

sources o inormation about a

company, attesting to that countrys

long-standing embrace o social media.

All corporate channels lose

trust, but employees are

considered reliable sources

o inormation

With business less trusted this year

than last, its not surprising that trust

in the company-generated commu-

nication channels that business uses

to reach stakeholders also declined.


Multiple Inormation Sources Enhance Credibility

Trust in corporate communications

like press releases, reports, and

e-mails ell to 26% rom 38%; a

companys own Web site to 24%

rom 31%; and corporate or product

advertising to 13% rom 20% among

inormed publics ages 35 to 64 in18 countries.

The Barometer added new questions

this year about the trustworthiness o

inormation about a company rom con-

versations that respondents have with

a companys employees, and rom

live company communication like a

speech by or interview with senior

management. Around the world, con-

versations with employees were the

most trusted o all corporate sourcesmonitored, at 40%, while live com-

munications earned a 27% trust level.

These ndings suggest that compa-

nies must employ a mix o channels

to help them earn the trust o

stakeholders and ensure that

messages are communicated to

and embraced byemployees, who

can serve as trusted conduits o

company inormation.

Dont know/refused

7%

4 or 5 times25%

6 to 9 times6%

10 ormore times

5%

Twice16%

Once6%

3 to 5 time

60%

3 times35%

When asked to volunteer a number, 60% o inormed publics ages25 to 64 in 20 countries say they need to hear inormation abouta company three to ve times to believe that the inormation iscredible. This nding suggests that limiting a corporate message orannouncement to a single channel or spokesperson will leave doubtin the audiences mind as to the inormations veracity. Distributingthe inormation on multiple channels will improve its chances orbelievability and acceptance.

Think about everything you see or hear every day about companies,

whether it is positive or negative. How many times in general do

you need to hear something about a specic company to believe

that the inormation is likely to be true?


17/24

A Call or Government Intervention

The mandate rom the respondents to this years Trust Barometer is clear: the old order, in

which business had the reedom to operate autonomously and without government restraint,

is over. But the new appetite or stricter government regulation o markets does not providebusiness with an out. Inormed publics expect business to partner with other institutions to

address scal and social ills and nd solutions to them.

A lack o trust triggers desire

or more government regulation

and control

In many parts o the world, the

credit crisis and the economic

downturn o late 2008 broughtcalls or government regulation o

troubled industriesand sparked

new debate about the extent to

which governments should intervene

in business. Overwhelmingly, Trust

Barometer respondents want gov-

ernment to intercede.

Among our global sample o 25-to-

64-year-old inormed publics in 20

countries, respondents by a 3-to-1

margin say that government should

intervene to regulate industry or

nationalize companies to restore

public trust (gure 17). This sentimentwas backed strongly in Western

Europe, led by France (84%), and in

North America, with 70% support

or this statement in Canada and

61% in the United States.

Agree

65%

Disagree

22%

Dont know

1%

Neither agree

nor disagree

12%

How strongly do you agree or disagree that your government should in the uture impose

stricter regulations and greater control over business across all industry sectors?

Figure 17: By a 3:1 margin, inormed publics agree government should

impose stricter regulations and greater control over business in all industries


In November 2008, the CEOs o the Big

Three automakersRichard Wagonero General Motors, Robert Nardelli o

Chrysler, and Alan Mulally o Fordtestiy

at a hearing on the automotive industry

bailout conducted by the Financial

Services Committee o the U.S. House

o Representatives. The ederal

government approved $17.4 billion in

loans ($13.4 or GM and $4 billion or

Chrysler); Ford said it did not need

government aid to survive and thrive.

A CALL FOR GOVERNMENT INTERVENTION



In the major Western European

economies o the U.K., France, and

Germany, three-quarters o respon-

dents agree that government should

step in to prevent uture nancial

crises (73%, 75%, and 74%, respec-

tively), using whatever means it seesappropriate, including lending money

or guaranteeing deposits. This belie

was echoed in the BRIC countries

as well, with Brazil (68%), Russia

(79%), India (78%), and China (73%)

all showing strong support or gov-

ernment intervention in the activity o

banks and the nancial industry.

In the United States, where govern-

ment has stepped in to bail out the

nancial and automobile industries,just under one-hal (49%) o respon-

dents agree that the ree market

should be allowed to unction

independently. This is the rst year

that the Barometer asked this question,

and the response is remarkable in a

country that in recent decades has

given business ree reign to lead.

Four pressing global issuesexamined as a yardstick

or trust

For the rst time, the Edelman Trust

Barometer asked respondents to

answer a series o questions about

our pressing societal issuesthe

nancial credit crisis, energy costs,

global warming, and access to

aordable health care. The goal was

to determine inormed publics

attitudes about who they believe

is responsible or causing these

problemsand who must solve them.

As igure 18 shows, respondents

believe that government and busi-

ness share responsibility or causing

these global issues.



How responsible are each o the ollowing entities or contributing to these global issues?

Financial Credit Crisis

Global Warming

BusinessesGovernmentand regulators

81% 84%

Energy Costs

Access to Aordable Health Care


77% 81%BusinessesGovernment

and regulators

80% 63%


80% 79%

Julie Gerberding, M.D.,director o the Centers orDisease Control and Preventionrom 2002 until 2009, anda counselor to Edelman

A QUESTION FOR...

Q:How can businesscontribute to better healthand more aordable care?

A:The undamental questionis not how we get aordable

care, but more health or themoney were investing. Itlltake a deliberate partnership on

the part o people, businesses,

and government. Health andsaety should be the way

all companies do business.Baseline benets should includetele-working, health screening

and education. Mandatingtobacco-ree workplaces is thesingle most important thingbusinesses can do.

Health and Business

Figure 18: Government and business share responsibility or causing global issues


19/24

Energy Costs Financial Credit Crisis Global Warming Affordable Health Care

0

10

20

30

40

50

60

70

80

90

100

47%

21%

4%

53%

24%

2%

41%

17%6%

70%

9% 3%

NGOsGovernment and regulators Business

Which one entity do you think should be most responsible or solving each o

these global issues?

Figure 19: Government held most responsible or solving global issues


in 20 countries

Do what itcan alone

Partner with governmentsand third parties

Play no role

Global North America EU Asia-Pacific Latin America BRIC

0

10

20

30

40

50

60

70

80

90

100

66%

31%

3%

57%

39%

2%

65%

30%

4%

65%

33%

2%

83%

15%

1%

69%

29%

2%

Thinking about the role that business should play in helping to solve global

issues such as energy costs, the nancial credit crisis, global warming, or

access to aordable health care, which o the ollowing statements is closest to

your view? 1) Business has to partner with governments and advocacy groups

to solve these global issues; it cannot do it alone; 2) Business should ocus

on what they themselves can do on these global issues, whether or not govern-

ments or others partner with them; 3) Business should not play a part in helping

to solve these global issues

Figure 20: Business has lost ability to lead unilaterally; must partner with

others to solve global issues


in 20 countries

Government, not NGOs, held

most responsible or solving

these issues

Non-governmental organizations are

the most trusted institution in 12 o 20

countries we surveyed. Yet, despite

the high levels o trust they receive,

NGOs are not held most responsible

or nding solutions to issues like

the inancial credit crisis, energy

costs, global warming, and access

to aordable health care. That

responsibility alls to government:

respondents globally believe govern-

ment is most responsible or solving

problems like the credit crisis, global

warming, and energy costs (gure 19).

Business has lost ability

to lead unilaterally; must

partner with others to solve

global issues

Business, however, should step up

to partner with government on

these global challenges, respondents

say. When asked what role business

should play to help solve issues

such as energy costs, the nancial

credit crisis, global warming, and

access to aordable health care,

two-thirds o 25-to-64-year-olds

surveyed around the world believe

that businesses should partner

with governments and other third

parties to address global issues

(gure 20). The partnership model is

especially welcomed in Latin America,

where 83% o respondents say

business should team up with third

parties to take on pressing prob-lems. Virtually no one believes that

business has no role in addressing

these challenges.

A CALL FOR GOVERNMENT INTERVENTION



Workers in China discard milk adulterated with melamine, which sickened more than 300,000 children and caused eight deaths in countries

around the world in 2008. Government inspectors discovered that 21 Chinese companies were producing milk, inant ormula, and other

products tainted by the industrial chemical. At least 11 countries stopped all imports o mainland Chinese dairy products and the scandal

led to the arrest, ring, or resignation o several government ocials and company leaders.

The Business Case or TrustThis years Trust Barometer leaves no doubt that there are tangible consequences or

businesses that gainor lackthe trust o their stakeholders. Trust infuences consumer

spending, corporate reputation, and a companys ability to navigate the regulatory environment.

Trust hits the bottom line

For the rst time, the Barometer mea-

sured the actions inormed publics

take based on how muchor how

littlethey trust a company. Over a12-month period, 91% o 25-to-64-

year-olds said they had bought a

product or service rom a company

they trusted, while 77% had reused

to buy a product or service rom a dis-

trusted company (gure 21, page 19).

We also nd that trust is connected

to a companys license to operate.

Respondents inclined to trust busi-

ness in general are more supportive

o a company in its eorts to sell its

products or services; pursue changes

in local laws; or seek preerential

treatment or tax, employment orenvironmental purposes than those

who dont trust business.

Hard and sot assets on

equal ooting

Among our global audience o 25-

to-64-year-olds, being able to trust

a company is one o the most

important actors in determining a

companys reputation (gure 22,

page 19). It ranks just below the

quality o a companys products

and its treatment o employees, on

par with a companys inancialuture, and more important than job

creation, giving back to the com-

munity, and innovation in products

and services. Transparency, dened

as requent and honest communica-

tion about the business, also outranks

those attributes.


21/24

94%

93%

91%

91%

91%

90%

90%

89%

87%

87%

86%

85%

Offers high quality products or services

Is a company that treats its employees well

Communicates frequently and honestlyon the state of its business

Is a company I trust

Gives value for money

Stays within the spirit and theletter of the law in [country]

Has a strong financial future

Has senior leadership that can be trusted

Has a strong commitment toprotect the environment

Is an innovator of newproducts, services, or ideas

Creates and keeps jobs in my area

Commits time, money, and resourcesto the greater public good


Refused to buy their products/services

Criticized them to a friend or colleague

Shared negative company opinions/experiences online

Sold shares

Chose to buy their products/services

Recommended them to a friend or colleague

Paid a premium for their products/services

Shared positive company opinions/experiences online

Bought shares

77%

72%

34%

17%

76%

42%

26%

55%

91%

Thinking back over the past 12 months, have you taken any o the ollowing

actions in relation to companies that you trust? Have you taken any o the

ollowing actions in relation to companies that you do not trust?

Figure 21: Through personal action, trust has tangible benets


Personal actions taken with...

A distrusted company A trusted company

THE BUSINESS CASE FOR TRUST

How important is each o the ollowing actors to the overall reputation o a company?

Figure 22: Communication and trust as important to reputation as value

or money

Doug Schoen, an advisorto U.S. President Bill Clinton

rom 1994 to 2000, and acounselor to Edelman

A QUESTION FOR...

Q:How should corporationscommunicate their businessand social objectives using

their CEOs, executives, andeveryday employees?

A:The Edelman Trust Barometercompellingly suggests thatcorporations rom CEOs downmust stay in close touch with

stakeholders, respond quickly

to questions, and get out anychanged circumstances or bad

news as it develops. Candor,consistency, and interactivityare the three words that

come to mind when askedto summarize the implicationso this years study.

Candid Communication



I would like to talk about the big

issues acing our country and the role

that we can play as retailers. To

those who say that now is not the

time or health care reorm, or a new

energy policy, or higher quality schools,

or comprehensive immigration reorm,

I say you are wrong.

Do special interests reuse to yield on

any part o their agenda, regardless o

the beneft to the common good? Ordo we come togethergovernment,

NGOs and businessin a new approach

to solving the big problems acing

our country?

Public Engagement: The Road to Rebuilding Trust

I businesses are to regain trust, they will need to adopt a strategy o Public Engagement,

by means o a shit in policy and communications. The essence o Public Engagement is the

commitment o companies to sayand do as they say.Organizations must be orthright and honest in their actions and communications. In a time o utter

distrust, business leaders must make the case or actions and then demonstrate their progress

against those goals. When problems arise within companies, stakeholders need to see senior

executives take a visible lead in acknowledging errors, correcting mistakes, and working with

employees to avoid similar problems going orward. This adherence to transparency is at the

core o each o the our pillars o Public Engagement:

Private Sector Diplomacy

Business has both the opportunity

and the responsibility to become a

primary actor in developing solutions

to global problems. Companies must

move beyond the silo o their proes-

sional trade association to partner

with governments and NGOs. They

must address not only the issues

that have an impact on their bottom

line, but also the worlds most pressing

problems. This is an opportunity or

business to act as a private sector

diplomat, recommending appropriate

regulatory rameworks across borders.

I companies ail to take the initiative

to do so, they run the risk o having

policies thrust upon them.

Mutual Social Responsibility

Companies must realign their

business practices so that they

benet society and the bottom line.

Companies must integrate into their

products and services approaches

to societal problems such as climate

change, health care, and energy

independence. Immediate stake-

holders like employees and customers

must be invited to participate in a

companys social responsibility dec-

isions and actionsand the public

at large must be kept inormed about

the progress the company is making

toward those goals.

Excerpts rom remarks made

by H. Lee Scott, Jr., ormer

president and CEO, Wal-Mart

Stores, Inc.* to the National

Retail Federation

In the United States, coee roaster and

retailer Starbucks* invites customers to

partner as a orce or good through

eorts like (STARBUCKS)RED and

My Starbucks Idea. The companys Im in!

program attracted 65,000 people on

Facebook who each pledged ve hours

o their time to volunteering, a total o

1.3 million hours o community service.*An Edelman client.


23/24

Shared Sacrifce

CEOs must demonstrate that they

too eel the burden o the recession.

At a time when workers are losing

jobs and investors are seeing stock

values plummet, voluntary executive

pay cuts and oreiting o bonuses

send a powerul message that leadersare in tune with the realities acing

employees. Leaders also must com-

municate with employees about the

problems conronting the company

and welcome their voices. This type

o transparency and collaborative

spirit will help engage them in nding

and embracing solutions.

Continuous Conversation

Sixty percent (60%) o our respondents

said they need to hear inormation

about a company three to ve times

beore they believe it. The CEO should

set orth the companys position, but

then it must be echoed by others

by individuals who oten sit outside

the companyincluding industry

experts, academics, and ordinary cit-

izens. Companies will be well served

by moving rom a mindset o control

to one o contribution. Mainstream

media continues to be an important

way to reach opinion ormers, but it is

not the only one. Companies should

Heavy equipment maker Caterpillar Inc.announced in late December it would cut

executive pay in hal, and many salaried

employees would see cuts o as much

as 15 percent. The Wall Street Journal

inorm, with a real commitment to

speed, the conversations among the

new infuencersalways underway

on blogs, in discussion orums, and

bulletin boards. Every company can

be a media company by creating

easily accessed, substantive on-

line content that can be improved by

the public.

The JNJ BTW blog rom Johnson & Johnson*

is among several initiatives the company has

launched to invite publics to share their views

on what the company is doing as well as

participate in the conversation about health.

PUBLIC ENGAGEMENT: THE ROAD TO REBUILDING TRUST

*An Edelman client.


24/24

Rising infuence o NGOs

Fall o the celebrity CEO

Earned media more credible than advertising

U.S. companies in Europe suer trust discount

Trust shits rom authorities to peers

A person like me is most credible spokesperson

Business more trusted than government and media

Young infuencers have more trust in business

Business must partner with government to regain trust

2001

2002

2003

2004

2005

2006

2007

20082009

A decade of insights from the Edelman Trust Barometer

Edelman, 2009. All rights reserved.

trust book final 2

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