|

Trust Level Drops Dramatically in the U.S.

By Curtis C. Verschoor, CMA, CPA
April 1, 2018
0 comments

Trust in institutions is stagnant globally but has collapsed in the U.S. and risen in China.

 

 

The Edelman Trust Barometer is an annual 28-country survey of individual opinions of the trustworthiness of four institutions: nonprofits, business, government, and the media. The most significant finding in the 2018 report is a 37-point aggregate decline in trust across all institutions in the United States compared with a 27-point gain in China. The U.S. downfall in trust was driven by a lack of faith in government and represents the largest drop ever recorded in the survey’s history. The U.S. overall trust index of the informed public declined 23 points during the year from 68% to 45%, and it’s at the bottom of the 28 countries surveyed. The index for the general population dropped from eighth place to 18th.

 

Richard Edelman, president and CEO of Edelman, said, “The United States is enduring an unprecedented crisis of trust. This is the first time that a massive drop in trust has not been linked to a pressing economic issue or catastrophe like the Fukushima nuclear disaster. In fact, it’s the ultimate irony that it’s happening at a time of prosperity, with the stock market and employment rates in the U.S. at record highs. The root cause of this fall is the lack of objective facts and rational discourse.”

 

The difference globally in trust perception between the informed public and the general population continues. Twenty of the 28 countries surveyed are in the distrust category for their general population, while the informed public in only seven countries distrust their institutions. Edelman states, “Declines of trust are no longer linked as closely to economic woes but instead to specific violations, such as quality control falsification at Japan Inc.’s Kobe Steel or the bribery scandal at Brazil’s JBS.”

 

China became the No. 1 Trust Barometer nation in both its general and informed public populations. Trust of the government jumped eight percentage points to 84% among the general population and three points in the informed population. The Chinese middle class is growing, and Chinese companies like Tencent Holdings and Alibaba are expanding into global markets. India, the UAE, Indonesia, and Singapore nearly match China’s trust scores.

 

In the U.S., 59% of respondents believe government is the most broken institution, whereas the China index is 38%. Conversely, 68% of Chinese respondents view their government as the institution most likely to lead to a better future, while in the U.S. that percentage is 15%.

 

For the first time, media has become the least-trusted institution globally, where it’s now distrusted in more than three-quarters of the surveyed countries. The media drop is due to a decline for the year in trust of platforms like social media and search engines that’s only partially offset by a recovery in faith in professional journalists. Since 2012, trust in these platforms has declined by two percentage points while trust in journalists has risen by five points. It’s troubling that 63% of respondents say that they have difficulty differentiating rumor, fake news, and outright falsehoods from good journalism. Seven in 10 respondents worry about fake news being used to confuse and convince people.

 

In the U.S., there’s a sharp divide in trust in the media among voters, with Clinton voters at 61% and Trump voters 34 points lower at 27%. “In a world where facts are under siege, credentialed sources are proving more important than ever,” said Stephen Kehoe, global chair of reputation at Edelman. “There are credibility problems for both platforms and sources. People’s trust in them is collapsing, leaving a vacuum and an opportunity for bona fide experts to fill.”

 

Half of the 2018 respondents aren’t engaged with the news, consuming news less than weekly, with the remainder evenly split between weekly or more consumers and amplifiers who share news or post commentary. The 2018 Barometer reports that the lack of confidence in the media is undermining trust and truth. Fifty-nine percent report not being sure what’s true and what isn’t, 56% not knowing which politicians to trust, and 42% not knowing which brands or business to trust. Gresham’s Law, based on the 18th Century observation that debased currency drives out the good, is now evident in the realm of information, with fake news crowding out real news. Leaders are going directly to the people, bashing the media as inaccurate and biased. These forces are taking a toll, according to Edelman.

 

The Edelman press release suggests that business should serve as an agent that causes change. Sixty-four percent of respondents say CEOs should take the lead on change rather than waiting for government to do so. Yet 60% believe CEOs are driven more by profits and stock price increases than a desire to make a positive difference in the world. Seventy-two percent of respondents say they trust their own company, and 84% think that their company can both increase profits and help the communities where they operate improve social and economic conditions. In China, 82% of respondents trust their employer, a three-point increase from 2016, whereas in the U.S., it’s 79%, a 15-point increase from 2016.

 

The annual letter to CEOs by Larry Fink, CEO of $6.3 trillion asset manager Blackrock, exhorts CEOs to follow a similar strategy of paying more attention to their company’s effect on society. Fink wrote that instead of focusing on short-term shareholder profit, companies must demonstrate a strategy for long-term value creation with emphasis on their effect on the world. According to Fink, “Society is demanding that companies, both public and private, serve a social purpose,” adding, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

 

IMA ETHICS HELPLINE

 

For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline.

 

In the U.S. or Canada, dial (800) 245-1383. In other countries, dial the AT&T USA Direct Access Number from www.usa.att.com/traveler/index.jsp, then the above number.

 

The IMA Helpline is designed to provide clarification of provisions in the IMA Statement of Ethical Professional Practice, which contains suggestions on how to resolve ethical conflicts. The helpline cannot be considered a hotline to report specific suspected ethical violations.

 

Curtis C. Verschoor, CMA, CPA, is the Emeritus Ledger & Quill Research Professor, School of Accountancy and MIS, and an honorary Senior Wicklander Research Fellow in the Institute for Business and Professional Ethics, both at DePaul University, Chicago. He is also a Research Scholar in the Center for Business Ethics at Bentley University, Waltham, Mass., and Chair-Emeritus of IMA’s Committee on Ethics. Trust Across America—Trust Around the World awarded him a Lifetime Achievement Award in 2016. In 2017, IMA published his book, Curt Verschoor on Ethics. His e-mail address is curtisverschoor@sbcglobal.net.
0 No Comments

You may also like