Thursday, February 26, 2009

Edelman Trust Barometer

I attended a talk yesterday at Rotman's Fleck Atrium by Richard Edelman. He gave an interesting perspective of our current crisis from a PR perspective and how it relates to the changing relationship between stock holders and stake holders, business and government.

Among his points, he highlighted that there is a broad based 3 to 1 ratio of trust in government versus business and that as a result business should partner with government and NGO's (who had much more credibility) to shape policy within the private sector. One intellegent question asked by an audience member was if the organizations with good credibility are put at risk when they partner with businesses. The good response was that as in any "marriage" there is some risk, and that it was incumbant on both parties to know what they were getting into.

Another hot topic was the idea of CEO compensation. With CEO salaries in the multiples of several hundred times some of the lower paid employees, the conflict between sky rocking compensation packages versus the ability to attract the talent and performance they were supposed to was also brought up as an issue of credibility. A good example is what was recently done by the CEO of Canadian banks who, unlike their US counter parts, have demonstrated more stable decline (not as sudden or sharp) but proactively cut their bonuses.

This started to raise a whole host of issues such as social responsibility, dispersion of authority and the need for continuous conversation (I would personally phrase this as closed loop versus open loop communication - the idea that you can't just drop a message and run, but that you have to stick around for feedback and critiquing).

One of the good take away messages that Canada has a strong potential to pick up some leadership in the national landscape as our banks were rated #1 in terms of trust due to our moderate social democracy and well governed mixed economy.

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