Richard Edelman delivered this speech on October 18, 2017 to the National Press Club.
Thank you, Danny, for that introduction, and thank you to the National Press Club for inviting me here today.
I’ve been in the PR business for 39 years. I’ve lived through many of the most dramatic upheavals in our industry. The rise and fall of cable TV. The dot-com boom. The explosion of digital media, then social media. Brexit and the 2016 U.S. election.
Today we live and work on a new battleground—trust. In countries around the world, people’s trust has plummeted with a loss of faith in democracy and capitalism. Who do you trust? has become the defining question of our times. And the answer seems to be: no one.
For 17 years, we’ve fielded the Edelman Trust Barometer, gauging trust in government, business, media and NGOs in 28 countries around the world. This year, we registered an implosion of trust in all four institutions. Trust in media completely collapsed, and trust in government continued to evaporate—which explains Brexit and the U.S. election. There is now a pronounced “mass-class” trust divide—a 15-point gap in trust between “the elite,” those with higher levels of income and education, and the less trusting mass population.
This profound crisis in trust has its origins in the Great Recession of 2008. The aftershocks of the meltdown of the global economy are still being felt. What began as anger over mortgage defaults, lost jobs and a failure to prosecute the business leaders responsible for the Recession has now exploded into a full array of fears. There is concern about downward mobility due to job outsourcing, automation, and immigration. Society has become polarized along ideological and economic lines. A majority of people around the world now believe that the system is failing them; they have little hope for the future. They have one common demand: change.
Dishonesty and malfeasance continue to plague business, from Deutsche Bank’s sub-prime mortgage fraud to Toshiba’s accounting scandal, with billions in fines. JBS, the world’s largest meatpacker, paid $150 million in bribes to politicians in Brazil. Uber’s CEO, Travis Kalanick, resigned over accusations of sexism. Biotech startup Theranos lied about the results of its clinical trials. The Panama Papers proved tax evasion on a global scale by moguls and athletes.
In the early years of the Trust Barometer, NGOs were the most-trusted institution, admired for their dedication to positive change. Since then, it’s been a downward slide, as they failed to meet expectations of performance. This year, trust in NGOs fell to nearly the same level as trust in business. NGOs are now distrusted in the GDP 5 — the U.S., China, Japan, Germany and the UK.
Government is now the least-trusted institution in the world. It is viewed as incompetent, stalled, and divided. The drop in government trust began several years ago in developed markets, with the inability of the European Union to fashion a compromise on loans to Greece and Portugal, plus the impasse over the U.S. government budget. In developing markets, including Brazil and Mexico, government trust collapsed in the wake of corruption scandals, and now is as much as 43 points below that of business.
The lack of government trust goes hand-in-hand with a lack of belief in leaders. Globally, over two-thirds of the general population do not have confidence that current leaders can address their country’s challenges. The credibility of CEOs fell by 12 points this year to 37 percent – we’re back down to the same numbers we saw after the crash in 2009. This isn’t that surprising, considering that 60 percent of adults worldwide can’t name a single CEO, and of the top three that people could name, only Mark Zuckerberg of Facebook still leads a company. Globally, a person like yourself is now far more credible than a CEO or government official. Authority now rests with our peers — the primary axis of communications is now horizontal.
The decline of trust in media is the big story of 2017. Media is facing serious business model problems. The number of reporters in daily newsrooms is half of what it was in the year 2000. There have been steep declines in revenues from newspaper and magazine advertising.
Media is now distrusted in 23 of the 28 countries we survey and is at all-time lows in 17 of them. It’s considered by many to be highly politicized, the bastion of the elite, ignoring the lives and voices of everyday people.
The “fake news” plague continues, with the revelations of thousands of Russia-bought fake political ads on Facebook and hundreds of Russia-linked Twitter accounts aimed at influencing the 2016 U.S. presidential election. During the recent Mexico City earthquake, anchors from Televisa provided live, minute-by-minute coverage of the story of a young girl named Frida Sofia, who was trapped under the debris of her school. But there was no such girl — Frida Sofia never existed.
Two-thirds of people now believe search engines over human editors. They create their own personal media echo chambers. They don’t regularly listen to people or organizations with whom they often disagree.
I have painted you a rather bleak picture — trust in media and government at crisis levels, and trust in NGOs on a continued downward slide. So now we are faced with a critical question: How do we restore people’s trust?
Business is the one remaining pillar of our society that is able to make this change. At only 52 percent trust globally, trust in business is hanging on by a thread. But people continue to ask business to play a role in making their lives better. Three-quarters of our Trust Barometer respondents said they believe that a company can simultaneously make money and improve the world.
Business has been doing this for years, moving from what began as CSR to a broader business model. The first move was in changes to the supply chain on the basis of issues, such as human rights for Nike and its factories in the early 2000s; or sustainability for Mars, Starbucks, Unilever, and others.
Today, the effort encompasses the full scope of how business does its business—from marketing to production to hiring — and addresses a broader spectrum of societal issues, such as gender equality or LGBT rights. It’s not happening universally, or consistently. But business no longer feels constrained by Milton Friedman’s long-held and erroneous dictum that “the one and only social responsibility of business is to use its resources and engage in activities designed to increase its profits…”
Instead, business can tap into what it does best—resources, strategy, and global reach—to step up and be the reasonable actor. Business is fast, innovative and accountable—it is best equipped to make change on a global scale in the shortest amount of time. We have seen time and again that putting the full force of business behind a social problem can be good for shareholders and for the world.
Businesses can take on this role by engaging in trust-building behaviors. Start with clear goals and then report on progress. Have your leaders act with integrity; most importantly, make sure compensation packages are fair and not excessive. Get ahead of change in the marketplace by providing retraining for those at risk of losing their jobs due to automation, such as the 3 million truck drivers in the U.S.
Follow the lead of corporations that are moving beyond their traditional role as economic engine and acting on important issues. Quicken Loans and JPMorgan Chase are helping to fuel the revival of Detroit. Starbucks is leading a coalition of companies in the hiring of 100,000 “disconnected” young Americans.
CEOs must lead from the front and speak out on these issues. Dan Schulman of PayPal cancelled plans to create 400 jobs in Charlotte, North Carolina, after the state passed the “bathroom bill.” Hamdi Ulukaya of Chobani has made it HR policy to hire refugees.
Brands must do their part, using their marketing prowess and consumer connection. According to our latest Earned Brand study, 65 percent of respondents said that they would only buy a brand if it took a position on issues of the day. Unilever, the consumer goods company, took action with its Sustainable Living Plan. It focused first on the supply side, reformulating products, opting for concentrates, and switching to recyclable packaging — that’s the easy part. The other two-thirds is educating consumers so that they will change their behaviors, such as persuading them that a cold water wash actually cleans clothes.
At Edelman, we are acting on the issues that our people and our clients care about. We are progressing toward 50:50 gender parity at the senior leadership level — women now represent 42 per cent of our senior leaders globally. This year, we have set a goal of improving our spend with diverse suppliers in the United States, including minority-, women-, and LGBTQ-owned businesses, among others. And we remain steadfast in our commitment to refuse any work related to guns, tobacco or coal.
Business also must inform the public and enhance their understanding of the issues of the day. Companies must put real dollars behind what we call collaborative journalism. The idea is to use your owned channels to educate on the issues and invite people in to discuss them. This can take several different forms:
First, a company can educate and lead on specific topics that it has deep knowledge of — for example, Walmart on China supply chain or GE on wind power. Provide first-person accounts of what goes on in your operations, research labs, and other activities so that people are better informed about what you do, and how and why you do it.
Second, create a platform for employees and customers to talk openly about your company or brand. Provide the ability to rate and review the business. Allow users to voice the good and the bad, permit self-criticism, and encourage open dialogue. Listen to what they say so you can improve your products—Samsung brought 50 loyal customers from across the U.S. to New York so that they could receive an exclusive preview of its Note 8 phone from the brand’s U.S. President, Tim Baxter. Create social communities based on people’s shared interests. United Airlines and Airbnb are two companies that have done all of these well.
Third, be an aggregator of commentary by smart bloggers and politicians. The World Economic Forum website pulls in the voices of experts from around the world to discuss the issues on its global agenda. Make it easy for people to find what they need to be informed.
Fourth, businesses must recast their communications. No more corporate speak. The public wants you to talk directly to them in language that is natural, honest, and authentic. They want you to talk like a human.
Finally, use your channels to report directly on your progress toward meeting your business goals, and be upfront about the changes you are making to get there. On its website, grocery chain Whole Foods reports on its goal to reach full transparency about genetically modified organisms by 2018, including detailed information about which of the products it sells contain GMOs.
I want to be clear that this concept of collaborative journalism only supplements mainstream journalism. Mainstream media is accountability journalism. Collaborative journalism can become both an open forum for discussion and a home for subject specialization.
If business is to take the lead in restoring trust, the PR industry must help in this evolution. We have to acknowledge that PR has contributed to society’s trust problem because it is often used as a means of defense, not as an instrument for constructive change. We need PR to adopt a positive agenda—to fight for the future instead of defending the past. Too much PR work is still focused on defending the old order that is rapidly disappearing.
We must be part of the solution by serving as a vital partner to business, informing not just on communications but also on strategy. As a strategic partner, PR needs to make two critical changes.
The first is to bring ethics and rectitude back to business. Be the client’s conscience. Every company and brand has a responsibility to behave ethically.
The second is to put employees first among stakeholders. Talking to and with them has never been more important for building trust and retaining the best talent. They are the most trusted spokespeople on every topic, from financial earnings to innovation to industry issues, more than CEOs, senior executives or even activist consumers. We need to enable employees to lead in peer-to-peer discussions.
Setting this positive agenda for PR, however, is all for naught if we work for companies or clients that ask us to betray the public trust. Not every client deserves representation. The perception of the PR industry has been damaged by the bad practices of a few firms that take on assignments that aren’t above-board and deploy the “dark arts” of PR.
The fact is that PR is basically an unregulated industry. The barrier to entry is low, making it easy for unethical or rogue behavior to go unchecked. We do not work in a court of law, but in the court of public opinion, which is fragile in a time when people distrust the system. Because information now goes directly to the people and is less filtered by the press, we are now that much more accountable for what we promote and what we share. It’s not only what we do but how we do it that matters.
The recent scandal involving Bell Pottinger, a leading PR firm in the U.K., has seriously stained our industry’s reputation. Bell Pottinger ran a secret disinformation campaign in South Africa on behalf of the Gupta family, aimed at supporting President Jacob Zuma. The campaign was designed to stir up racial tensions. This reprehensible work was deemed “unprofessional and unethical” by the PRCA, the Public Relations and Communications Association. The PRCA sanctioned the firm and banned it from its ranks for at least five years — the strongest indictment of an agency’s behavior it has ever handed down. A 20-year-old company went bankrupt within two weeks.
Some PR professionals sign on to ethics, practice and conduct codes set down by membership organizations, such as the Arthur Page Society for corporate communicators, or the IABC and the Public Relations Society of America for agency professionals. While worthwhile, these codes vary greatly by organization and they aren’t fully subscribed to. By themselves, they do not safeguard ethical behavior. They can’t prevent what happens in the soft underbelly of our business.
This crazy quilt of PR standards will no longer suffice. We must do better. We need a set of principles that are universal, consistent, and well understood across the industry. The time has come to adhere to a single set of strong standards, and to hold all of our people accountable to them.
I call this these standards the PR Compact. It comprises four simple but powerful principles that everyone in our industry must uphold:
1. Insist on accuracy. Check the facts. Don’t just accept what a client tells you as the truth. Get third-party validation and cite sources. Correct errors quickly.
2. Demand transparency. Press clients to disclose their financial interests in advocacy programs and to reveal their role in coalitions. Advocate for laws that require more transparency in communications. Report on non-financial metrics in supply chains and hiring practices.
3. Engage in the free and open exchange of ideas. Create platforms that encourage and empower informed public discourse. Tell both sides of the story, and allow for dissenting views. This benefits business, shareholders, and society.
4. Require everyone to take universal online ethics training. Everyone must learn the same best practices—what is right and what is not. Tie advancement and promotion to successful completion of the course. This training should be free and accessible to all, in the same way that Khan Academy is for students.
To implement these standards, I call for the formation of a coalition, led by the Arthur Page Society on behalf of corporations, and the PR Council for agencies. It will serve as the industry watchdog in the United States, enforce the PR Compact, and educate on it. And it will partner with like-minded groups globally to ensure that one standard is being followed around the world.
The PR Compact will ensure that PR has a role in guiding the transformation of business. It is how we will fight for the future. It will help advance our most important goal: a better informed populace.
Today I have told you about a profound crisis in trust. We have moved into a time when eroding trust in institutions is challenging people’s belief in the basic assumptions of fairness, shared values and equal opportunity. The consequence is nothing less than a complete unraveling of the system.
I suggested that business must fill the trust void by doing what it does best, expanding its remit from economic engine to change agent, acting where government is unable, informing where media needs to be supplemented. The business of business is to be part of the solution—far beyond philanthropy and CSR to real changes in strategy, operations, and communications. This includes putting real resources behind collaborative journalism that gives employees and consumers the voice they deserve while helping the general populace understand the how and why in specific subject areas such as supply chain or employee practices.
PR must become business’s vital partner in this effort. PR can help companies evolve their strategies and operations, promote their businesses and products, and protect their reputations. At Edelman, we call this communications marketing — PR for the modern era. By moving from defense to offense, and adopting a set of universal ethical principles, PR can help business drive positive change.
Ladies and gentlemen, we can’t afford to fail. We must win on the battleground that is trust.