Corporate America’s bold and swift response to North Carolina and Georgia’s new laws limiting legal protections for the lesbian, gay, bisexual and transgender community has been remarkable. The fact that executives at top companies have been publicly vocal about a societal issue signals a seismic shift in the role business leaders are hoping to play over public policy. They are looking to be agents of change, a trend that suggests the emergence of a new model of CEO leadership.
This comes at a time when most people have a hard time trusting today’s executives, according to The Edelman Trust Barometer, which surveyed 33,000 people in 28 countries between October and November in 2015.
Although trust in CEOs rose over the past year (to a global average of 49%), the general population trusts business as an institution more than it trusts its leaders, the Trust Barometer showed. A majority of respondents view business as the institution most capable of keeping pace with the changing demands of the global economy (compared to government, NGOs and media). Yet more than half surveyed do not trust CEOs to do what is right.
To understand why, it’s helpful to trace how the public persona of the CEO role has changed over the past few decades and how, as the survey suggests, it is entering a new era
Back in the 1980s and ‘90s, business leaders like Martha Stewart and Mark Cuban easily made headlines based on their business acumen and pop culture status. And while the current popularity of Donald Trump might suggest otherwise, the era of the celebrity CEO essentially ended with the 2008 global financial crisis.
Faced with the burdens of government regulations and activist investors, CEOs avoided public attention. Instead of being present at public-facing events or weighing in on the issues of the day, chief executives put their heads down and turned inward, focusing on increasing revenues and cutting costs.
It’s not surprising, then, that 47% of respondents surveyed in the Trust Barometer said that they cannot name a single CEO.
The time has come for the invisibility cloak to come off because expectations of business and its leaders are changing. Most Trust Barometer respondents said that CEOs focus too much on short-term financial results (67%) and lobbying (57%), and not enough on job creation (49%) or positive long-term impact (57%).
What’s more, while most CEOs believe that their duty is to center their communications on the operational and financial aspects of a company, 80% of those surveyed say that a CEO should be personally visible in discussing societal issues like income inequality.
The majority of people may not trust CEOs, but they are calling on them to be visible, real and human. They want to hear from an open, honest leader. How can a CEO heed the call?
Shareholders may evaluate CEOs’ performance based on the health of their companies’ balance sheets. But a broader range of stakeholders shape their opinions and decide whether they trust executives through four lenses: actions; perceived values; treatment of employees (and what they say about you); and how you engage with the community. According to the survey, the most important trust-building attribute is “leading with integrity,” and there are several ways to build this integrity in the eyes of key audiences:
Be visible. Stakeholders fully expect to hear from CEOs frequently and openly about both earning profits and providing societal benefits. According to respondents, 74% expressed the importance of CEOs being personally visible in communicating about the future of an industry.
Take a stand. CEOs need not shy away from taking a controversial stand; rather they must be more purpose-driven, with a clear point of view on how his or her company and industry contributes to society in positive ways.
Tell a personal story. People expect a more human, relatable CEO. According to respondents, the following types of information are important to building trust in a CEO: personal values (79%); obstacles overcome (70%); personal success story (65%); education and how it shaped you (62%).
Put employees first. Eighty-one percent of respondents agree communicating with employees is most important in building trust in a CEO, even more so than meetings with investors and analysts. CEOs must engage with employees regularly and openly. They are a company’s most powerful ambassadors and advocates.
Engage directly. Forty-seven percent of respondents expressed the importance of placing the customer ahead of profit. Fortunately for CEOs there is an ever-increasing number of communications channels providing a wide variety of ways to engage with a company’s most important stakeholders.
Recently, several global CEOs have stepped forward on a range of important industry and social issues, including Salesforce (CRM) CEO Mark Benioff. Facebook (FB) CEO Mark Zuckerberg (the only CEO who achieved double-digit recall globally in the Trust Barometer) consistently shares a mix of content and commentary across personal, company and industry interests.
CEOs have an opportunity to build and strengthen relationships by engaging and communicating in a way that is transparent and open.As the data indicates, business leadership as usual won’t cut it in today’s world. The mandate is now broader.
Matthew Harrington is Global COO of Edelman, a communications marketing firm. He is a specialist in corporate positioning and reputation management.