Brands, Business Ethics and Democracy

​By Paul Head, CEO CAANZ

​There is a disturbing trend rippling through the Western world (at least, depending on your politics) with the rise of Donald Trump, Nigel Farage, and populism more generally. While ominous comparisons with the 1930s are premature at the moment, they may yet prove to be somewhat accurate, as those who have not learnt the lessons of history could well be doomed to repeat them.

However it plays out, the rise of populism is merely symptomatic of a broader issue: the erosion of trust in the so-called ‘elites’ of the developed world and the institutions they run, and it has serious implications for business and brand owners.

I’ve just heard a presentation from CAANZ member Acumen Republic of the Acumen Edelman Trust Barometer; a survey across 28 countries measuring the public’s trust in a range of institutions including NGOs, business, media and government. Across the world, people see “the system” failing and trust in institutions is down. New Zealand is no different, which is perhaps surprising given the strong economic performance over the past few years. Across the West there is an undermining of confidence in the entire system.

Particularly concerning is that the failure of media to predict Trump and Brexit has led to a huge and rapid undermining of confidence in that industry. This sentiment is being revisited upon the media in New Zealand and may worsen globally as Trump increases his attack on the free press in the US.

Perhaps more surprising is the decline of trust in business. In New Zealand this has dropped over the past 12 months and as businesses that should concern all of us.

The Acumen Edelman research indicates that companies need to more effectively demonstrate ethical practices, be seen to treat their employees well, and have a core purpose over and above the profit motive. Most business I know would say they’re already doing that – and that’s probably true – but crucially, it’s not the truth as perceived by our consumers.

So we need to do better. We need to do better at telling our stories, not just to ourselves and our stakeholders, but to the electorate more generally.

Building trusted brands is a good place to start. Brands that communicate authentically in an engaging way are more likely to be trusted. That’s not news, but the research indicates we need to do more.

Trust and ethical behaviour go hand in hand. Ethics comprise the foundation of your business character and cannot be compromised without dire consequences. There are no shortcuts when it comes to being ethical: either you do the right thing, or you don’t.

Former GE CEO Jack Welch once said: “Cut the crap in approaching ethics”. Instead of writing down lots of rules and debating the fine points of legalese, he used one simple question to address the conscience of each individual he employed: “Can you look in the mirror in the morning and be proud of what you’re doing?” That may sound a little homespun these days, but at its core it still holds true. Ethical behaviour sends a message to employees, clients, and members of our community that we care about more than profit alone – and that we deserve their trust.

Business employs people, it generates growth and it pays taxes. Trusted brands help build trusted businesses. Business collectively is a key institution in society and has a role to play in supporting a robust democracy.

In a world of sceptical consumers and disenfranchised members of society (the same people, by the way) our job is to build trust in our brands and businesses. Not just for our own sake, but for the sake of society more generally and a stable democracy. We all have a role to play.