Published by The Financial Times on October 17th, 2012, this letter was written by GlobeScan Foundation President, Doug Miller, in response to an October 11th, 2012 article entitled "Companies are facing a new type of opponent”
Sir Michael Skapinker’s article “Companies are facing a new type of opponent” (October 11) builds very well on Simon Zadek’s keen observation that conflict today stems increasingly from the gulf between rich and poor within countries.
Mr. Skapinker goes on to argue quite effectively that this has created a new opposing force to free enterprise, as demonstrated by seemingly random and unexpected uprisings at mines in South Africa, at Foxconn in China and during last year’s riots in Britain (not to mention Occupy Wall Street).
This phenomenon is underscored by the poll we conducted for the BBC World Service earlier this year, which revealed that majorities in 18 of 24 countries see the economic system in their country as unfair in distributing economic benefits and costs. The fact that companies are increasingly being targeted by these “new opponents” is understandable given another finding from the same poll – that free enterprise as currently practised is progressively losing its appeal. While one in two citizens across the 24 countries believes flaws in the free market system can be fixed through reform and regulation, fully one in four now sees it as fatally flawed and that a new economic system is needed.
We would argue that the best defence to all this is a good offence. Big companies first need to manage their reputation proactively among their stakeholders to avoid being targeted; and second, they need to rediscover an authentic societal purpose at the heart of their enterprise from which to demonstrate the efficacy of free enterprise in meeting the real needs of the majority of people.
I used to joke in client presentations that those chief financial officers and other executives who continued to oppose corporate social responsibility initiatives by their companies would one day awake to discover that CSR had been replaced by something they would like even less. Well, this is it.
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Over many years, GlobeScan’s regular tracking of global publics’ trust in different types of institutions has shown that NGOs are clearly the most trusted. Compared to global and national businesses, governments, and the media, trust in NGOs is significantly higher and continues to rise slowly.
To further investigate why this high level of trust exists, we asked people to say what NGOs had done recently to earn their trust. The word cloud derived from their responses starkly illustrates two key findings. The first is the prominence of “help” (and to a lesser extent "support") along with two key recipients of that help, “people” and “environment.” This highlights how important tangible outcomes are to people’s willingness to see NGOs as trustworthy. It also adds weight to what GlobeScan found in its global public polling in 2008—that the consensus of public support for NGOs’ role in aid and assistance work is greater than for their political campaigning and advocacy.
Paradoxically, the other very frequent response is “nothing.” This raises an important question of whether the high level of trust in NGOs we witness is, at least in part, based on blind faith that NGOs can be trusted, simply because of what they represent. Indeed in recent research conducted in the US and UK, we found few people admit to knowing much about how non-profits and charities operate, despite most people believing they are the most effective change-makers.
NGOs should be wary of this potentially shaky foundation of public trust. Both historical and recent examples of scandals and controversies engulfing NGOs demonstrate how quickly trust can be wiped away, especially in the age of social media.
Two themes formed the backdrop to the World Economic Forum’s 2014 gathering in Davos, Switzerland that ended this week: the return of the global economy to a semblance of stability and the continuing shift of power from West to East. This mixture of economic flux and stability feeds through into our research, with peoples’ views in the institutions that affect their lives, the environment and how they think of certain countries all affected.
One of the messages to emerge from GlobeScan’s 2013 Radar survey was the rise of trust in institutions (see chart below). Though trust in institutions has continued to rise strongly in developing countries as economies and living standards have risen, the developed world’s public perception of institutions plunged during the economic crisis. There was, however, some recovery in 2013, as the developed world’s trust in the private sector rose, albeit from record lows and remaining within negative territory in the case of global business, as GDP, jobs and disposable income began to exhibit signs of a return to health. Trust in government also rose, though at a slower pace amid concerns over public debt.
In addition to rising trust, our research tells us that global concern over the economy has begun to recede and we are once again witnessing rising concern over the environment. Former US Vice-President Al Gore put global warming on the agenda, warning attendees that climate change was now even more of a threat than before the economic crisis that forced it off policymakers’ radar. The chart below suggests that the global public are inclined to agree: concern about various environment-related issues has started to climb back to levels seen historically, before the financial crisis.
However, despite evidence that the improving economic outlook is buoying trust in institutions and concern over the environment, the economic system remains unbalanced, leading to a shift in global power structures. During the Davos summit Japanese Prime Minister Shinzo Abe characterized relations between China and Japan as akin to those between Britain and Germany in the lead up to the First World War. However, when GlobeScan asked respondents from across Asia what they felt of their neighbours in 2013 it was apparent that Japan enjoys little international sympathy in its territorial disputes with its neighbours. As early as 2012 a significant proportion of South Koreans told us that tensions with Japan over the Liancourt rocks were the biggest issue facing their nation. Public perceptions of Japan have fallen sharply in Australia, South Korea, India, Russia, and South Korea. Chinese views could barely fall further. American views on Japan have hardened too, despite the proportion of Japanese who say their superpower ally has a ‘positive influence’ leaping ten points (to 42%) between 2012 and 2013.
Though Davos was billed as a look forward to a changing world, the changes facing us are in many ways not new. For the first time since 2009 global interest in environmental issues is on the rise, this may force global leaders to heed Vice-President Gore’s call and put green issues firmly back on the agenda, even if this will only return the situation to the same place as in 2009. Meanwhile, comparisons to Europe in 1914 are probably overblown, but there is no doubt that regional antipathy toward Japan will make it harder to ‘de-escalate’ the situation to mutual satisfaction. What may well offer the greatest opportunity for financial and government institutions to put in place long term solutions to systemic economic problems and tackle that other Davos buzzword ‘inequality’, is the global public’s increasing willingness to trust those who take decisions on their behalf.