Trust and the movement for change - Sustainability column
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Thousands of people around the world recently protested corporate greed and austerity measures. Trust in big business, especially the financial sector, has hit record lows due to bailouts, poor customer service, risky products, job cuts, and bonuses. However, this loss of trust also creates opportunities for companies to reform themselves and change their practices. Companies can strengthen processes, improve products, increase transparency, and build trust again through actions that show respect for employees, customers, and communities.
Trust and the movement for change - Sustainability column
- 1. Sustainability column Trust and the movement for change Last weekend, thousands of people around the world took to the streets to protest against “austerity” and “corporate greed”. There were protests in Madrid, Rome, Lisbon and Athens. In London, demonstrators occupied the steps of St. Paul’s Cathedral in the city’s financial district. In New York, where the movement began, ‘Occupy Wall Street’ protesters once more surged onto the streets. It’s clear that trust in the corporate sector has sunk to its lowest level for decades. For most of these protesters, Big Business has become a Big Problem. Such a loss of trust, of course, is never good news. But it does open up opportunities for companies – opportunities to do things differently, and, conceivably, to do things better. Bearing the brunt Not surprisingly, it’s the financial sector that has borne the brunt of most of the criticism about corporate greed. When it comes to trust, banks and insurance companies have hit rock bottom. According to the latest survey by the US communications firm Edelman, fewer people now trust banks and insurers than companies in any other sector of the economy. You don’t have to dig too deep to discover the reasons: bail-outs, poor customer service, products that have misfired, financial losses, job cuts, bonuses…
- 2. How much do you trust the following industries to do what is right? 85% 81% 80% 75% 69% 68% 70% 66% 65% 65% 63% 62% 60% 57% 54% 55% 52% 51% 50% 45% 40% Public anger is creating pressure for change – and this is ultimately where opportunities for companies like AEGON will emerge. Change is already coming about in several ways: To begin with, customers are behaving differently. In the financial services industry, they’ve become more demanding and more aware of risk. They want simpler products – products they can understand, but that will also deliver the right returns. Increasingly, people also expect companies to do the right things – to manage scarce resources responsibly and to treat employees, customers and local communities with respect. And, if companies don’t, they’re more willing more than ever to blow the whistle. Change is also coming from politicians. Governments are tightening financial regulations. And in Europe and the United States, they are bringing in new, tougher consumer protection laws.
- 3. Positive change An extra shove, of course, has come from the global economic crisis. Current public anger probably has as much to do with unemployment, government spending cuts and slow growth as it does with bankers’ bonuses. Companies like AEGON can use this pressure for positive change. They can use it to strengthen their systems and processes, and make them better. They can improve their products. They can develop new ways of distribution. They can become more transparent and more open to outside influences. They can build trust again. We shouldn’t forget: customers tend to do business with companies they trust, and avoid companies they don’t. That’s the good news. The bad news is: all this inevitably takes time. Research shows that most people who distrust a company simply don’t believe what that company is telling them. Actions, in other words, speak louder than corporate promises. That was always true. But, given current public anger, it’s doubly so now. ----------------------------------------------------------------------------------------------- The views and opinions expressed in this document are solely those of the author and do not necessarily represent those of AEGON N.V. This document is for information purposes only and any reliance you place on such information is strictly at your own risk. AEGON N.V., its affiliates and the author cannot be held responsible for the accuracy or reliability of the contents of this document.