Indians trust corporates and government less now: survey

As many as 49 per cent Indians repose less faith in their corporations and government than they did a year ago, as per the Edelman Trust Barometer report.

While the trust level in India is higher than the global average of 62 per cent, there has been a major decline in trust level on corporates in India.

The United States registered the maximum decline, as nearly 77 per cent contacted in the survey saying they trust corporation less this year than they did a year ago.

Global opinion leaders say their most credible source of information about a company is now an ordinary persons than a CEO or other senior officials. In the US, the trust level on ordinary persons has  increased from 20 per cent in 2003 to 68 per cent today. Opinion leaders also consider rank-and-file employees more credible spokespersons than corporate CEOs (42 per cent vs 28 per cent in the US).

The Edelman Trust Barometer found Microsoft Corporation the most trusted global company, followed by iconic companies in their home markets, including Toyota in Japan, Haier in China, Samsung in South Korea, and Petrobras in Brazil.

''We have reached an important juncture, where the lack of trust in established institutions and figures of authority has motivated people to trust their peers as the best sources of information about a company,'' said Richard Edelman, president and CEO, Edelman. ''Companies need to move away from sole reliance on top-down messages delivered to elites toward fostering peer-to-peer dialog among consumers and employees, activating a company's most credible advocates,'' he added.

This year's survey assesses the impact on trust of a company's national origin, industry sector, behaviors and communications policies. Key findings, which are being presented this week at the World Economic Forum in Davos, include:

Opinion leaders in Europe apply a significant ''trust discount'' for major US brands, such as Coca-Cola (US= 65 per cent vs Europe= 41 per cent); McDonalds (51 per cent vs 30 per cent); P&G (70 per cent vs 44 per cent); and UPS (84 per cent vs 53 per cent). There is no ''trust discount'' for non-American global brands operating in the US or any other market (e.g. Sony = 74 per cent in Japan, and 79 per cent in the US), with the exception of Japanese brands in China.

Western-based companies continue to make big strides in winning trust in the Chinese market. Big gainers this year included Citigroup, Procter & Gamble, Shell, Unilever and UPS, all now rated trustworthy by more than 75 per cent of Chinese respondents, and up from under 50 per cent two years ago.

German and Canadian companies are highly regarded by more than 70 per cent of opinion leaders in every market surveyed. Less than 40 per cent of opinion leaders expressed trust in global companies headquartered in emerging markets such as China and India, as well as in Korea. Such companies face particular trust deficits when seeking to buy companies in overseas markets.

Companies in the technology and retail sectors are the most trusted, while energy and media-entertainment are the least-trusted industries.

Pharmaceutical concerns face considerable skepticism in the US and Germany, while financial firms fare much better in the US and Asia than in Europe.

''Social media is on the rise, particularly in the BRIC countries (Brazil, Russia, India, and China). As expected, it is also more highly used and trusted by young opinion elites. Wikipedia ranks as the No. 2 source of credible information among 25-to-34-year-old opinion elites in the United States, by 55% of respondents.''

Television is the big loser in media trustworthiness with the rise of the internet. Twenty-nine per cent of respondents in the US still cite TV first as trustworthy for information, although down from 39 per cent three years ago. The internet is now trusted by 19 per cent, up from 10 per cent in 2003. The same trend is evident in the UK, where television has declined from 42 per cent to 33 per cent as respondents' first choice, while the internet has risen from 5 per cent to 15 per cent. Newspapers, which are often thought to be the most serious casualty of the internet wave, show rankings essentially unchanged in most markets at approximately 20 per cent. Newspapers remain the first trusted medium of choice for respondents in France, Germany, Japan, Brazil, Korea, and Italy.

''Articles in business magazines'' is the most credible source of information about a company (US = 66 per cent, Canada = 53 per cent; Brazil = 75 per cent Europe = 60 per cent), followed closely by ''friends and family,'' which has grown very strongly in the US ('03=35 per cent vs '06=58 per cent); Brazil ('04=66 per cent vs '06=73 per cent) and Canada ('05=43 per cent vs '06=58 per cent).

In most markets, more than 80 per cent say they would refuse to buy goods or services from a company they do not trust, and more than 70 per cent will ''criticise them to people they know,'' with one-third sharing their opinions and experiences of a distrusted company on the web.

Trust in institutions overall is lowest in Germany and France, and highest in China, Brazil and the US. Business was trusted by only 33 per cent of respondents in Germany, and only 28 per cent in France, vs 45 per cent in Spain, 51 per cent in Italy and 53 per cent in the UK. (Comparable figures for the US and China are 49 per cent and 56 per cent, respectively.)

Government is the least-trusted institution in Brazil, Spain, Germany, and South Korea, and remains low in the US (38 per cent), UK (33 per cent), France (32 per cent), and Canada (36 per cent). It has increased in China (83 per cent, up from 63 per cent in '05) and Japan (66 per cent, up from 43 per cent in '05). Trust in media is low across all countries except for China (73 per cent) and South Korea (49 per cent).

Trust in non-governmental organisations (NGOs), which have consistently been the most-trusted institution in Europe during the six years that the survey has been conducted, has steadily increased in the US ('01=36 per cent, '06=54 per cent); and increased significantly in the last 12 months in Canada ('05=45 per cent, '06=57 per cent) and Japan ('05=43 per cent, '06=66 per cent). Despite the survey asking for only trusted global companies, many respondents volunteered NGOs such as the Red Cross in France and the UK and Greenpeace in Germany were also frequently mentioned. NGOs are now the most-trusted institution in every market except Japan and Brazil. The widespread rise in trust of NGOs has now extended to Asia, especially in China, where ratings went from 36 per cent to 60 per cent in last 12 months.

''Trust is the key objective for global companies today because it underpins corporate reputation and gives them license to operate,'' said Michael Deaver, vice chairman, Edelman. ''To build trust, companies need to localize communications, be transparent, and engage multiple stakeholders continuously as advocates across a broad array of communications channels.

The Edelman Annual Trust Barometer tracks the attitudes of nearly 2,000 opinion leaders around the world – which institutions, companies, sources of information they trust, what drives that trust, and the credibility of institutions. The seventh survey was conducted through 25-minute telephone interviews among nearly 2,000 opinion leaders: 400 in the US; 750 in Europe; 150 each in the UK, France, Germany, Italy and Spain; 200 in China; and 150 each in Canada, Japan, Brazil and South Korea.

Opinion leaders are defined as being between 35-64 years, college graduates with a household income of more than $75,000 or equivalent, and reporting a significant interest and engagement in the media, and in economic affairs and policy issues. There is no tracking data for Italy, Spain and South Korea, which were added this year.