This year New Zealand’s directors must do more to embrace and lead societal change, the Institute of Directors says.
The IoD was referring to findings of the global Edelman Trust Barometer 2020 survey released at the World Economic Summit at Davos, Switzerland.
“The Edelman study has being going since 2001,” IoD’s Governance Leadership Centre general manager Felicity Caird says in a media release.
“This year the research shows that in spite of a strong global economy and near full employment, a ‘trust paradox’ has emerged; and people want business leaders to be more vocal on social issues.
“According to the Trust Barometer 2020, 92 percent of people in 28 countries expect chief executives to speak up more, about issues that potentially will affect them economically,” she says.
“It’s interesting also that internationally, people place more trust in business competency than they do in non-government organisations, government and media.
“This global Barometer 2020 survey finds that people want business leaders to speak up more about important societal issues that they may not have talked about much before – such as the value of capitalism, inequity, income inequality, diversity and other social concerns,” Caird says.
“For the first time in the study’s history, business is now tied with NGOs as the most trusted institution compared to government and media. Trust is primarily built on ethics and competence.
“Seventy-three percent of the 34,000 people in the study believe a company can take actions that both increase profits and also improve conditions in communities where they operate,” she says.
“Another important key finding in the Trust Barometer 2020 survey is that 87 percent of people believe businesses need to serve the interests of all stakeholders, not only shareholders.
“People overseas are worried about the impact of automation on jobs and concerned that technology is used ethically. Working people want income equality, action on climate change and issues around immigration are important topics for them.
“Employees want chief executives to take the lead on change,” Caird says. “They want reassurance from their leaders that their organisations will support them, for example, in training for the jobs of the future.
“Companies are seen as being efficient in getting things done, they have strong leadership and purpose, can act on sustainability and serve all stakeholder interests. Business and directors can be the leading catalyst for positive societal change.
“Entering this new decade, directors in 2020 have the opportunity to set broader leadership expectations and ask their chief executives to show stronger visible leadership on key issues.”
In IoD’s survey of directors’ sentiment last year, 34 percent of New Zealand directors thought business leaders and chief executives should be speaking out more on social issues.
“Boards of directors are the guardians of the organisations they serve. Their role is to guide their organisations in making choices and decisions that create a strong, fair and sustainable future,” says Caird.
The Edelman Trust Barometer 2020 surveyed 34,000 people in 28 countries. See https://www.edelman.com/trustbarometer
