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Trust Building

Trust Building, The Emergence of NGOs and Purpose in Asia

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Tomorrow in Hong Kong, we release the Asia Pacific results for the 2013 Edelman Trust Barometer. I am thrilled to be back to the region that was my home for more than 16 years to share our study.

Getting ready for roundtables, colleague and client meetings and media discussions I will take part in this week, I reached out to many of my friends in the region over the weekend to canvass opinions on what they thought looked interesting in this year’s study. As always, there is great interest in the annual fluctuations in trust in the four institutions we measure (Government, Business, Media and NGOs) across countries and industries and the underlying reasons for those movements.

Perhaps more interesting to me and the longer-term observers of trust in the region, however, is the continuing trend of increasing trust in NGOs in Asia. Since 2008, trust in NGOs in China has gone up from 48 percent to 81 percent. In addition, Asian markets (China, Malaysia, Hong Kong and Singapore) have four of the five highest trust ratings for NGOs globally – Mexico joins those four markets to round out the top five. In Asia now, like the rest of world, NGOs have emerged as the most-trusted institution.

Among the factors driving the steady increase in trust for NGOs across Asia since 2008 are the following:

  • Increased recognition for – and greatly improved governance of – home-grown Asian NGOs. Largely gone are the days of Asian NGOs whose heads and founders drive S-Class Mercedes and do not share their records with donors and/or auditors.
  • A migration of global NGOs away from traditional, combative/name-and-shame campaigns against Asian governments and businesses and towards a more cooperative model of engagement to address shared interests related to labor, the environment, health care and supply chains.
  • A much expanded middle class with plenty of choice in which brands they purchase and with expectations for how businesses and brands behave beyond any immediate commercial transaction.
  • Savvy use of social media by NGOs and consumers to drive dialogue on issues important to them that may not receive coverage or commentary in state-owned/state-controlled media in markets where the media’s mission remains nation-building.

Complementing the rise in trust in NGOs is also the emergence of Purpose as a “table stakes” expectation for stakeholders to grant trust to businesses in the region – and, indeed, globally.

Over the past two years, we’ve asked our 31,000 global respondents (and 11,000+ respondents in Asia) to help us identify five performance clusters critical to building trust. Following Operational Excellence as a cost of entry to building trust is Purpose. There are four behaviors that our respondents expect companies and brands to exhibit related to Purpose:

  • Work to protect and improve the environment
  • Address society’s needs in everyday business activities
  • Create programs that positively impact local communities
  • Partner with NGOs, governments and third-parties to address societal needs

When I consider the specific behavioral expectations related to Purpose combined with the rise of NGOs to the region’s most-trusted institution, I land on a few critical points for business to consider:

  • Western MNCs operating in the region’s markets can learn a lot from embedded, local MNCs as it relates to patriarchal behavior. Home-grown Asian companies (many of them family-owned) have long had a tradition of taking care of the needs of their communities as part of their basic, day-to-day operations. These companies have done so without seeking fanfare, they have simply undertaken community activities as part of their family-based ethos. Now that Purpose has emerged as “table stakes,” Western companies operating in the region can learn how to embed community-based behaviors into their operations from their local counterparts.
  • Asian-based multi-nationals need to become more comfortable in discussing their Purpose-based programs (along with detailing environmental, labor and supply chain practices). While Asian businesses, in general, have strong track records in addressing community needs, they also have a cultural bias against communicating about their community work. Asian companies, to continue to earn trust and to gain a global “license to lead,” must engage stakeholders on their community programs and also become much more transparent in their performance in operational areas of importance to both customer- and non-customer stakeholders.
  • NGOs and governments are looking to business to partner with them to address wide-ranging societal needs in the rapidly-growing markets of the region. Western MNCs and Asian-based MNCs have partnership opportunities – and, frankly, business and social responsibilities – to work with other institutions to ensure, long-term sustainable growth and development as prescribed by Michael Porter and Mark Kramer in their seminal piece on Shared Value published in the Harvard Business Review.

While companies need to develop broad, consistent plans that address the above, the Trust Barometer also identifies market nuances and provides insights that are fine-tuned against specific stakeholder expectations.

I will continue to update my thoughts on this topic and other Trust-related topics as I travel the region this week.

Alan VanderMolen is vice chairman, DJE Holdings, president and CEO, global practices.

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