Private Companies Earn the Public’s Trust
In the summer of 2020, Gallup polled Americans on their confidence in U.S. institutions and, unsurprisingly, the poll showed Americans lacked confidence in almost every one. Just 13% of those polled had a “great deal of confidence” or “quite a lot of confidence” in Congress, 40% in the Supreme Court, 18% in television news, 24% in newspapers and 32% in large technology companies.
For business, the results were mixed. Only 19% of respondents had high confidence in “big business,” but 75% had high confidence in “small business.” In fact, small business had the highest confidence ratings of any institution and was one of only three with a net positive confidence rating. (The other two were the military, with 72%, and the medical system, with 51%.)
These data points align with the 2021 Edelman Trust Barometer, the global communications firm’s 21st annual trust and credibility survey. Edelman found that while business overall remains the only trusted institution, large majorities of Americans from both sides of the political spectrum trust their “employer CEO,” though only a minority trust “CEOs” in general. While private companies vary in ownership structure — including PE-backed, family-owned and founder-owned — and in size, most Americans don’t think of them as “big business,” even if they generate revenues similar to those of public companies. The high trust in “my CEO” isn’t surprising, given that most Americans in the private sector are employed by private rather than public companies. Participants in the Edelman study might have associated “CEOs” in general with the leaders of large publicly traded corporations and distinguished them from “their CEO.”
As we’ve noted in Private Company Director, many private companies’ attitudes, outlooks and values have earned them the trust and confidence of the American public. And, in particular, private companies’ focus on creating long-term value enables them to better balance purpose with profit, support multiple stakeholders, develop values-driven cultures and recognize and accept environmental, social and governance (ESG) responsibilities.
In a time when trust in most sectors of society is at a record low, private companies, as one of the few trusted institutions, have a significant role to play in helping our nation — for example, by encouraging employees to get vaccinated. Private companies have a unique opportunity, and a special responsibility, to make a positive difference.
It should be noted, however, that it takes a long time to earn trust and confidence from employees, customers, suppliers and communities. This trust could quickly fade, as evidenced by the recent polling data on other institutions. It is the board’s role to ensure that management maintains this high trust. To do so, boards must stay focused on what ultimately built this trust — focusing on the long term and supporting multiple stakeholders. Given the depressing fact that very few institutions have Americans’ confidence, maintaining this trust level in private companies is more important for our nation than it has ever been.