How Boards Nurture, Measure Stakeholder Trust? Deloitte Reveals

Deloitte said its global survey revealed that business leaders recognize the importance of stakeholder trust, but do not consistently prioritize it in the board governance strategies.

The Deloitte Global Boardroom Program surveyed 177 directors and C-suite executives across 30 countries in October 2022 to better understand how companies -- and boards, in particular -- are addressing trust as a critical agenda item.

Usually, trust is seen as a softer issue not capable of measurement and consequently tracking progress on how trust performs over time, Deloitte India Chairperson Atul Dhawan said in a statement.

There’s a need for a framework that would not just measure but provide a path for implementation of the related initiatives, he added, noting that such a framework can make trust a part of the strategy and culture, define individual responsibilities and accountability.

“Building trust amongst the stakeholders is one of the top priorities for businesses in India especially as the economy matures and moves up the growth ladder,” Dhawan said.

Following are the key highlights from Deloitte’s survey:

Operationalizing Trust As Business Priority

• 94% percent of global board members and executives surveyed said trust is “important” to their organization’s performance, while the remaining 6% said it is “somewhat important.”

• 67% of respondents said their organization approaches trust proactively, and that trust is built into their ongoing operations.

• 22% said they have no consistent approach and 8% only prioritize trust in the wake of a crisis.

• 39% of respondents categorized their organization as achieving a high level of trust maturity and said they regularly discuss it at board and executive meetings.

• 45% of respondents reported a moderate level of trust maturity, while 16% of respondents said their organizations have a low level of trust maturity.

Ownership Of Trust Agenda

• 82% of respondents said the CEO is ultimately responsible for trust leadership at the company, while 95% believe the board should play a key part in building and protecting stakeholder trust.

• Survey results suggested that boards have more work to do to embed trust as a prominent feature on the agenda.

• 53% said they have no fixed cadence for such discussions, while 28% of respondents said their boards put trust on the agenda twice a year or more, and 10% reported that they do not discuss trust at all as a board.

Trust Hinges On Evolving Stakeholder Concerns

• Environmental, social and governance (ESG) issues are quickly becoming some of the issues more likely to impact corporate trust building and the survey showed this trend is accelerating.

• 45% of respondents said ESG is a key driver of trust for their company right now, while that number increases to 61% when respondents pointed to priorities over the next three years.

• The respondents envisioned ESG and climate change becoming even more of a priority than other vital trust areas as customer experience (52%), innovation (50%), and cybersecurity (49%).

Barriers To Building Or Rebuilding Trust

• Lack of clarity over which actions to take and how to measure progress (46%).

• Lack of a designated owner of trust management (21%) and complacency (18%).

• 33% of respondents believe there are no barriers to building or rebuilding trust.

The respondents said their organization needs to perform an ongoing, consistent trust assessment, develop a comprehensive definition and framework of trust in the context of the organization, as well as include trust as a regular item on the board and management team agenda in order to earn stakeholder trust.