The Association of Corporate Counsel (ACC) and Edelman have released their first joint Trust in Business Report, a survey of chief legal officers (CLOs) and institutional investors on their perceptions of how to increase public trust in businesses.
This is their first collaboration in measuring the factors that impact corporate trust from the perspective of chief legal officers (CLOs) and institutional investors.
Drawing on ACC’s 2020 CLO Survey and Edelman’s 2019 Trust Barometer, the report also cuts across several categories and examines corporate culture issues, as well as environment/sustainability/governance (ESG) practices.
The report highlights the need for a holistic approach to trust. The data suggest that CLOs tend to approach building trust more from a demographic standpoint, while institutional investors tend to focus on top-level business strategy.
Nevertheless, survey results indicate that the two groups agree on several key factors in earning public trust, including a well-enforced, regularly surveyed, ethical company culture and a proactive board of directors. Both groups also valued diversity in company leadership, stressed the need for continued ESG efforts, and expressed doubts that most companies are adequately prepared for employee activism.
“While there’s no debate that establishing and maintaining the public’s trust in a company is critical, how to get there may differ, based on one’s perspective,” said Sandra Wu, president of ACC Hong Kong’s executive committee.
“In-house lawyers understand that trust is critical, and they are increasingly asked to play key roles to build trust from the inside and contribute to cultivating the company’s relationships with investors, shareholders, employees and clients alike. This paper is a useful tool that we anticipate will spark thought and spur important discussions with the goal of increasing trust in business.”
Josh Hochberg, general manager, financial communications and capital markets at Edelman, said: “Investors are now acutely focused on how employees and other stakeholders can impact the valuation of companies in which they invest. Companies that excel in driving ESG and other factors beyond financial performance will gain a clear advantage in winning investor trust and supporting a premium valuation.”