Executives think consumers trust businesses more than they actually do

June 17, 2022, 11:45 AM UTC

Companies are working overtime to attract new consumers and understand the needs of their client base. But a new study finds a significant discrepancy between how leaders think consumers and employees view their company and how both groups actually perceive the company. 

In a PwC survey of over 5,000 executives, employees, and consumers, Wes Bricker, vice chair at the consulting firm, observed “a jarring trust perception gap.” While 87% of business leaders said their customers have high trust in their company, only 30% of consumers said the same. As for employees, 84% of business leaders said workers highly trust their company, but just 69% of employees agreed.

“Business leaders tend to overestimate how much the stakeholder groups really trust them, and what actually drives trust,” Bricker said in a media call. Mohamed Kande, another PwC vice chair, added that “the cost of losing trust outweighed the benefits of getting it.”

Perhaps most interestingly, consumers expressed that how a company treats its employees is just as important as the quality, price, and variety of its products or services when it comes to building trust.

PwC

“It’s a foundational element to trust building,” Bricker explained. “But we continue to see a trust gap on that topic and the need for continued communication but also, importantly, action.” Poor employee treatment leads to lower retention, and poor product and service outcomes, he added, noting that employers need a mindset shift of “treating employees as customers.”

Despite growing focus on ESG standards, PwC’s survey found that those factors aren’t as important to consumers and employees as the aforementioned foundational elements.

Bricker said dealing with these foundational items—trust, treating employees well, fairly pricing products—enables “businesses to move on to focusing on environmental goals and larger societal issues.” And with rising inflation and claims that corporate greed is driving up prices, transparency and openness around pricing are all the more important for building consumer trust.

“Those societal issues are important,” Bricker explained, “but they don’t address the central issue with employees and customers around affordability and around treating employees well.”

Aman Kidwai
aman.kidwai@fortune.com

Building a legacy brand like Whirlpool requires trust—both earning and retaining it. If you’d like to learn more about what business leaders can do to build and restore trust with their employees, consumers, and industries, then sign up for Fortune’s new newsletter, The Trust Factor, launching this June 26. Each Sunday my colleague Jacob Carpenter will analyze the critical role of trust in corporate America, offer insight and advice from experienced experts, and provide actionable tips executives can take to build faith in their leadership and business.

Headlines

The PM to HR pipeline. As companies continue to grapple with remote and hybrid work models, office attendance policies, and new workplace tech, a new kind of HR leader is emerging. CHROs are increasingly tapping product management leads or individuals with UX design chops to manage the remote employee experience. It's an acknowledgement of the increased effort required to meet employee needs and compete in today’s talent market. Fortune

Worker power wanes. With unemployment ticking up, rising inflation, and a potential recession looming, the power that workers felt just a year ago is fading. Office occupancy is rising as workers become more willing to return to the office and accept in-person jobs. Though the labor market still favors workers, they’re also more concerned about job security than before. WSJ

Google settles for $118M. Google has agreed to pay $118 million to settle a class-action lawsuit alleging gender bias. As part of the settlement, an independent expert will also evaluate the company’s hiring practices and a labor economist will review its pay equity studies. The settlement comes shortly after Google settled for $100 million in response to a data tracking lawsuit. Bloomberg

BOARD MOVEMENT

CVB Financial Corp has appointed Kimberly Sheehy to its board of directors. Yahoo announced the addition of six new board members: Jessica Alba, actress and founder of The Honest Company; Aryeh Bourkoff, founder and CEO of investment firm LionTree; Fouad ElNaggar, co-founder and CEO of Array; Cynthia Marshall, CEO of the Dallas Mavericks ; Michael Kives, founder and CEO of K5 Global; and Katie Stanton, founder and general partner at Moxxie Ventures. FedEx has added Amy Lane, former managing director at Merrill Lynch, and Jim Vena, former COO at Union Pacific Corp, to its board. Unilever has appointed Nelson Peltz, CEO of Trian Fund Management, to its board. EV technology company Proterra has appointed Jan Hauser, a former partner at PwC, to its board. Trimark USA has added Doug Jones, EVP and chief supply chain officer at MSC Industrial Supply Co., and longtime exec Kathy Lane to its board. Eventbrite has elected April Underwood, former CEO of local marketplace platform Nearby to its board. Alejandro Quiroz Centeno, CEO Latin America for Prysmian Group, has been appointed to the board of IDEX Corporation. Cisco EVP & GM Jeetu Patel and Fidelma Russo, CTO at Hewlett Packard Enterprise, have joined the board of Equinix. Williams-Sonoma marketing executive Jeanine Barnett Silberblatt is joining the board of marketing software company Zeta.

View from the C-Suite

March of Dimes President and CEO Stacey D. Stewart at the headquarters in Arlington, Va., on Monday, June 13, 2022.
Photograph by Lexey Swall

Stacey Stewart is a former investment banker turned chief diversity officer, who, in 2017, became CEO of the nonprofit March for Dimes. The organization’s mission is to lead “the fight for the health of all moms and babies.” Lately, that’s meant undoing the pandemic’s deleterious effect on mothers and children.

In an interview with Fortune’s Phil Wahba, Stewart discusses the pandemic’s disproportionate impact on women, how she’s forging private sector partnerships, and the nonprofit’s acceptance of crypto donations.

Read the full story here.

This is the web version of The Modern Board, a newsletter focusing on mastering the new rules of corporate leadership. Sign up to get it delivered free to your inbox.

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet