The Edelman Trust Barometer report shows that trust in companies is at crisis levels. David Grayson argues that we can repair the relationship with society by pushing for progressive policies

The word "post-factual" was named word of the year for 2016 in Germany. It means people don´t need facts and don’t care much about facts; all they want is emotions and buzz regardless of substance and truth.

Similarly, the Oxford Dictionaries nominated post-truth as its word of the year: defined as “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief”.

The perils of the post-factual, post-truth world have been on show in Washington in the past 10 days. As Gideon Rachman said in an op-ed article in the Financial Times: “The man from the BBC was laughing as he reported the White House’s false claims about the size of the crowd at Donald Trump’s inauguration. He should have been crying. What we are witnessing is the destruction of the credibility of the American government.”

Using social media to fight back
All of us as small “d” democrats, as active citizens, yes as citizens of the world, should be concerned. But as someone who prefers to find solutions, to light a candle rather than to curse the darkness, I was struck by the possibility contained in another article in the FT. It tells the story of Tej Bahadur Yadav, of India’s Border Security Force, who has made national headlines with Facebook videos complaining about his food rations along India’s tense line-of-control with neighbouring Pakistan. The author of the article wrote: “That a soldier posted in a remote border area could unleash such a kerfuffle via a video, highlights how Indians armed with mobile phones are taking to social media to hold to account the traditionally non-responsive political and bureaucratic establishment.”

 

Yes! Intense, pervasive global connectivity, including social media, can amplify post-factual, post-truth, but it can also empower the fight back. In a remarkable TEDx talk filmed in Amsterdam last November, Eliot Higgins, founder of citizen investigative journalism website Bellingcat, talks about how ordinary citizens pieced together – from myriad online sources, including social media postings – the data that established the facts about how a Russian missile shot down Malaysian Airlines flight MH17 from Amsterdam over the Ukraine with the loss of 298 lives.

This online, open-source investigation was crucial for the Dutch-led Joint Investigation Team, which confirmed in September that the Buk missile system had been transported from Russia on the day of the crash, fired from a field in a rebel-controlled area and returned to Russia after the Buk was used to shoot down MH17. So what does all this mean for businesses?

 

 

The naked corporation
It means we are now in a world where everything is ultimately for the record. The Canadian writer Don Tapscott wrote a best-selling book called The Naked Corporation about the enforced transparency that businesses and other organisations now face. As Tapscott says, if you are going to be naked, you had better be buff!

One crucial message I took from the BP Deepwater Horizon disaster in the Gulf of Mexico in 2010 was precisely this lesson about the naked corporation. You can make a strong argument that BP lost control of the crisis when the US Congress forced BP to provide a live-feed of the oil gushing out of the damaged well-head 5,000ft below the Gulf of Mexico. Congress immediately put that live-feed on the Internet. Right away you had geologists and retired oil exploration folk around the world commenting online, sharing their calculations and fatally undermining the BP estimates of how many thousand barrels of oil were escaping. Up to that point, the US authorities had been using the BP estimates. Suddenly, the credibility of BP was shot through. Crucially, the world lost trust in BP.

 

Which brings us to the recently released 2017 Edelman Trust Barometer, which revealed that trust is in crisis around the world. The general population’s trust in all four key institutions — business, government, NGOs, and media — has declined broadly, a phenomenon not reported since Edelman began tracking trust among this segment in 2012. With the fall of trust, the majority of respondents now lack full belief that the overall system is working for them. In this climate, people’s societal and economic concerns, including globalisation, the pace of innovation and eroding social values, turn into fears, spurring the rise of populist actions now playing out in several western-style democracies. I think the general public’s loss of trust in authority generally has been the catalyst that has allowed post-factual, post-truth.

So, for big businesses specifically you will certainly need the skills of experts like Edelman, and similar, to be prepared for post-factual, post-truth attacks. But the real, long-term defence will be to make yourself a trusted business. And in my view, this cannot be based on business as usual.

Beyond ‘do no harm’
As a minimum, businesses need to understand their material social, environmental and economic impacts and actively to minimise them: to do no harm. I would argue, however, (as do business leaders like Paul Polman from Unilever) that businesses that aspire to continue into the indefinite future, to be sustainable in every sense of the word, need to do more than no harm - and need to seek net positive impact.

That involves abandoning the false Anglo-Saxon dogma that the purpose of business is to maximise shareholder-value. Optimising value to shareholders and other stakeholders over the medium to long-term should be the consequence of a well-run business, but not its purpose.

As the British economist John Kay has argued: to suggest the purpose of business is to maximise shareholder-value is like saying that breathing is the purpose of life! It is a necessary requirement but hardly the purpose. Rather each business needs to define its own purpose, what the Harvard professor Rebecca Henderson calls “a concrete, pro-social goal or objective for the firm that reaches beyond profit-maximization”, as Unilever has done with its Sustainable Living Plan.

Learn from the B Corps
Sometimes long-established incumbents have to learn from newcomers, the disruptive innovators. In this case, I would suggest there is much to learn from the B-Corp movement, which began in the US but has now spread around the world. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. They pursue profit with purpose, not as two parallel goals but as an integral, single organising idea.

John Browne, Lord Browne of Maddingley, the former CEO of BP, has written a very readable and practical book called Connect. He argues that if businesses are to re-build trust, to connect with society they need to do four things: understand their material impacts, define a societal purpose beyond just profit, apply world-class management skills to this mission and - Browne’s words not mine - radically engage with a range of different stakeholders, including critics. In other words, companies have to get beyond the “business as usual” echo chambers.

 

I would argue that world-class today requires individual companies to set science or evidence-based targets for improving their social, environmental and economic impacts. The centre I run at Cranfield University School of Management has just published a paper on science or evidence-based targets. Allow me one final observation. A truly responsible business will thoughtfully, humbly but firmly and with conviction, be an active corporate citizen.

That includes not just the right, but arguably the responsibility, to advocate as an individual business and collectively through trade associations and business federations for pro-sustainable development public policies. That means business leaders being willing to lift their heads above the parapet when public policies are hostile to diversity and inclusion or human rights or sustainable development.

The very best companies are supporting NGOs that are working to defend human rights and the environment, especially in those parts of the world where there is weak or poor or even bad governance, and where civil society organisations are under threat from repressive laws and punitive state sanctions and from post-factual, post-truth. (See The business case for backing civil rights defenders)

Big business needs to radically engage with stakeholders so that it hears truth spoken to its power, but also to be willing to speak truth to politicians and governments if they are using post-factual, post-truth. As Edmund Burke, the eighteenth century Irish statesman, said: “All that is necessary for evil to triumph is for good men [and women] to do nothing.”

David Grayson CBE is director of the new Doughty Centre for Corporate Responsibility at the Cranfield School of Management, Cranfield University, and a member of Ethical Corporation’s board of advisors. This is an abridged version of remarks he made in Frankfurt at the German launch of the 2017 Edelman Trust Barometer