Trust Across America-Trust Around the World, via its FACTS® Framework, been tracking the performance of America’s most trustworthy public companies for over five years, and the results should warrant some serious attention. Trustworthy companies have produced an 80.9% return vs. the S&P’s 45.2% since August 2012; that’s a 79% edge.
But still, the media chooses to focus on the countless stories of bad corporate behavior and the ongoing distrust in business, and rarely do we hear senior management mention the word “trust†until the fallout from a crisis requires mitigation. And what is usually the root cause of the crisis? Low trust, and a failure of senior leadership to place trust on its agenda. If this sounds to you like a vicious cycle, it is, and certainly doesn’t represent the best path forward to reverse decades of declining trust in business and on Wall Street.
Combine the chart above with the following data and The Case for Trust becomes increasingly difficult to ignore.
The Hard Costs of Low Trust
- Gallup’s research (2011) places 71% percent of U.S. workers as either not engaged or actively disengaged.
- The disengaged workforce (Gallup, August, 2013) is costing the US economy $450-550 billion a year, which is over 15% of payroll costs.
- The Washington Post reported that “the federal government imposed an estimated $216 billion in regulatory costs on the economy (in 2012), nearly double its previous record.â€
- The cost of the tort litigation system alone in the United States is over $250 billion. – or 2% of GDP (Forbes, January 2012)
- The six biggest U.S. banks, led by JP Morgan Chase & Co. and Bank of America Corp. have piled up $103 billion in legal costs since the financial crisis (Bloomberg, August 2013)
- According to The Economist Intelligence Unit (2010), 84% of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only 12% of them reported doing anything about this problem.
- According to Edelman globally, 50% of consumers trust businesses, but just 18% trust business leadership.
- And finally, in the United States, the statistics are similar, but the story is a bit worse for leadership. While 50% of U.S. consumers trust businesses, just 15% trust business leadership.
