How CEOs Became More Trusted Than Politicians In a Pandemic
CEOs used to be soulless globalists — now we expect them to save us.
For a half-century, big company executives have been among the most maligned figures on the American stage — defamed as mere suits, bloodthirsty war profiteers, soulless millionaires and billionaires, and unpatriotic globalists. But at a time of cratering markets, rock-bottom trust, and a dangerous new virus, CEOs in the U.S. and elsewhere have somehow emerged as bastions of credibility, according to a new survey.
As COVID-19 clamps a huge padlock on the U.S. and world economies, vast majorities of the public say CEOs are most likely to tell the truth, stand up for what’s right, and safeguard their employees and ordinary people, according to Edelman, a crisis management firm, which released the survey Monday at an event at the Atlantic Council in Washington, D.C.
Americans and people in nine other major countries said they trust their own employer more than the media, the government, or any other institution. The contest is not close, says Edelman, which produces a much-followed annual report on global trust. “My employer” is trusted on average by 75% of the public, far higher than business-at-large (56%) and the media (47%).
In prior Edelman reports, it had become clear that the public was looking for companies to take a stand on public issues. But the latest survey is the first to all but demand that employers take charge when something needs doing.
The pool of faith in business puts serious new pressure on prominent companies, which are often ambivalent when it comes to considering the broader impact of their decisions beyond shareholders. Whether CEOs are prepared to do so or not, the public across the 10 countries surveyed expects prominent companies not to wait for distrusted politicians to conspicuously take the offensive. Some of this change may be generational — millennials may have a different attitude from baby boomers on the role of companies, one that harkens back to the 1960s’ anti-corporation militancy. Some of it comes from a newer breed of startups and companies claiming to be “mission-driven.”
The reasons cited in the survey are both competence — people believe by a 54-point margin that companies are more able than anyone else to deliver — and a conviction that they have the greatest freedom to actually do something. Among the expectations are that companies will pay decent wages (83%) and provide retraining when jobs are automated away (79%).
Perhaps not surprisingly given the current times, although public demands of companies are high, expectations that CEOs will come through is low — fewer than a third think their employers will accomplish these things. Yet, the suggestion is that popular commercial punishment might rain down on companies that fail to take charge. “The belief is that ‘my employer’ is better prepared than ‘my government,’” said Richard Edelman, chairman of Edelman.
The COVID-19 crisis is tailor-made for the new public sentiment. On March 13, President Donald Trump, his own credibility under a severe test because of the collapsing stock market and a delayed reaction to the seriousness of COVID-19, held a news conference where he declared a national emergency and introduced a parade of CEOs, each of whom pledged to do their part in controlling the virus. They included Walmart CEO Doug McMillon, Target CEO Brian Cornell, and Walgreens president Richard Ashworth, who spoke for a few minutes and stood alongside Trump on stage.
Though in that case, the executives seemed to be attempting at least in part to placate Trump as much as the public, in subsequent days, the world’s best-known companies have appeared to be trying to stake high ground. Apple has offered to let distressed users of its branded credit card forgo interest for the month of March. Patagonia and Levi’s said they would close their stores because of the virus and that they would pay their employees as usual. LVMH, the Paris-based luxury company, said it would start to manufacture and deliver free hand sanitizer in France.
Jared Spataro, head of the Microsoft unit overseeing its Office 365 software, said that he recently participated in a call about the virus with executives from a number of large companies, including Amazon and Starbucks. Companies are in a new environment, he said, in which the question is “What is the role of business in society? To whom is it accountable?”
A split has emerged between companies that suggest that, at least for now, they will pay their employees while their operations are curtailed or stopped and another group that wants their workers to rely on their sick pay. In the former group is Taco Bell, and among the latter are Whole Foods, which is owned by Amazon, and Walmart. Tesla CEO Elon Musk is in a category all his own, flouting the new zeitgeist, obtaining special permission from authorities to keep his Fremont plant open while downplaying COVID-19, saying he himself intends to keep working but telling his workers they can stay home if they wish.
The difference may reflect CEOs striking a balance between satisfying their teams and staying in business. “The biggest company challenge is how do they keep themselves an operating concern while doing well by their employees,” said Karen Harris, head of Bain & Company’s Macro Trends Group.