Trust: The Most Valuable Commodity

Buffett’s observation about trust in business has only become more important in today’s interconnected world. In an age where information (and misinformation) travels at the speed of social media, trust is more important than ever to business success and sustainability over the long term. More than ever, integrity is the ultimate brand attribute.

- Ong Xiang Hong

Companies build trust on a daily basis in routine interactions with customers, consistently delivering on their promises or going to great lengths to rectify the situation when they cannot. They behave as if their customers’ satisfaction and wellbeing are their most important considerations, leaving customers with a feeling of partnership rather than adversity. Or so the idea goes.

However, many organisational cultures encourage opportunistic behaviour, whether purposely or inadvertently. Poor moral leadership, performance incentives that lead employees to be single-mindedly hypercompetitive, lack of open and frequent discussion of ethical implications—such attributes make it more likely that employees will view relationships with customers and even fellow employees with a zero-sum mentality.

Across the world, trust in established institutions has been falling—whether it’s in government, non-governmental organizations, or business. According to the long-running Edelman Trust Barometer, businesses, government, and media have all seen a drop in trust over the past decade. In addition, Gallup research also show that worldwide, two-thirds of adults say corruption is widespread in business.

Consequently, businesses worldwide are suffering from a trust deficit. Even for well-managed companies, establishing a reputation for integrity can be a challenge in the modern era, as employees, customers and investors in most countries start from a point of scepticism.

Does this matter? Yes, for two reasons. One is that the evaporation of trust in some key institutions is directly damaging for economic growth. The general distrust of business, not only banks but also spreading to energy companies, retailers, food producers and others, will tend to encourage unnecessary (as well as necessary) regulation and contribute to the climate of uncertainty holding back investment.