Building Trust Between Industry, Government, and Civil Society

Trust and governance is fundamental to a country’s growth, enabling an environment where businesses can thrive. There is no alternative to building and strengthening trust. Thus, businesses, government, and individuals need to work together with each other to understand the challenges leading to a trust deficit and address these issues. 

Companies that focus on good governance gain a competitive edge, enhance their reputation, and attract investors, all of which contribute to long-term success and development. Most companies that have made significant strides in governance, voluntarily adopt best practices that go beyond regulatory compliance. 

What does trust mean for companies? 

Trust is both a moral imperative and strategic asset for businesses as it contributes resilience during crisis, boosts brand equity, fosters customer loyalty, and motivates employees. It also means not unfairly benefiting one group, (e.g. promoters), at the expense of others (e.g. minority shareholders). By consistently delivering on promises and maintaining high standards, trust becomes the driver of sustainable growth and a differentiator in the marketplace. These factors ultimately enhance financial performance. 

Two strands of trust are- inward trust that is maintained within the organization and outward trust that comes into play when interacting with external stakeholders. By prioritizing them, businesses can build more robust internal systems, improve public-stakeholder relationships, and contribute to a more dynamic society and economy.

Building Trust with Technology 

Technology offers a powerful tool for companies to build and sustain trust. But it is essential that these tools are used ethically, transparently, and securely. Technology can enhance transparency by offering real-time access to essential information. Companies should leverage this through digital platforms, social media, and feedback and collaboration tools allowing stakeholders to easily voice their opinions and concerns. Robust cyber security measures, ethical use of technology, and providing employees with a safe and anonymous channel to report issues make technology an enabler for building trust.

Trust is not built by technology alone, but combining it with authentic, transparent, and empathetic practices across all levels of the organization.

Building Trust Across Stakeholder Ecosystems 

Trust building is an ongoing process involving multiple stakeholders such as clients, employees, investors, regulators, and communities. Thus, building trust happens both internally and externally. For internal stakeholders, leadership, teamwork, and collaboration is critical, whereas for external stakeholders, smooth operations, loyalty, positive community impact, collaboration and ethical and reliable interactions are essential. 

What Should Companies Do to Build Trust? 

Companies should work towards establishing corporate purpose through long-term goals and objectives aligned with the values and aspirations of organizations and stakeholders. They should also establish a risk and crisis management framework to insulate the organization from possible risks. The survey conducted by CII also mentions how companies can ensure compliance with applicable laws and regulations, along with financial integrity to build trust. In today’s time, building responsible and ethical use of AI and technology must be ensured to maintain trust with consumers. Other than these, conflict management, maintaining open and honest communication with all stakeholders, commitment to ESG responsibility, and employee engagement and empowerment can also help companies build this intangible asset. 

Challenges in Building the Trust 

According to a survey conducted and reported in The Shared Responsibility of Building & Strengthening Trust by the Confederation of Indian Industries (CII), companies highlighted challenges to building trust. The primary challenge of which is mistrust, as it is a societal issue irrespective of the level of development of a country. In terms of technological changes, the rapid expansion of algorithms in quest to achieve artificial intelligence is a factor that plays a major role in generating mistrust.

Balancing conflicting expectations such as cost-cutting measures and employee welfare or profitability and social responsibility also presents one of the biggest challenges in building trust. Additionally, lack of transparency or inconsistent communication can lead to doubts and mistrust.

Mistrust leads to lost revenue, increased operating costs, brand and reputation damage, regulatory scrutiny and employee turnover, making the economic consequences significant and far-reaching for companies. 

Way Forward 

Building and strengthening trust in the business ecosystem helps in sustained growth and progress of the industry. Business enterprises must realign their strategies towards strengthening trust in the face of an ever-changing business and regulatory environment.