World Economic Forum Annual Meeting 2010

  • Rebuilding Trust in Business Leadership

    Thursday 28th January 2010 - 9:00am - 10:00am

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  • Rebuilding Trust in Business Leadership

    A global survey in 2009 revealed that only 29% of respondents trust information communicated by CEOs, down from 36% in 2008.

    What steps should business leaders take to rebuild trust among their stakeholders?

    Key Points


    • Without trust, market economies cannot function
    • After public trust in business took a plunge 18 months ago, it has remained low, and threatens to fall even lower
    • CEOs are considered the least credible spokespeople for their corporations, and strong leaders are valued far less than trustworthy companies
    • Further eroding trust, 34 million people have become unemployed since 2007; most of those that have jobs have also suffered: the pay gap between the shop floor and the board room has been widening steadily over the past 30 years
    • Short-term incentive systems in the future must give way to a long-term sustainable recovery built on values-based decision-making

    Synopsis

    In the wake of the greatest financial crisis since the Great Depression, public trust in business is weak and threatens to collapse entirely. Banks are the least trusted businesses, although the entire private sector is perceived as opaque, and there is plenty of blame for the crisis to go around. CEO compensation scandals, decried by the US Administration and media, have further eroded confidence.

    To rebuild public confidence in the private sector, corporate executives must serve as private sector diplomats, seeking to explain their roles in society to the public, and their business goals and principles to their employees and shareholders. CEOs must avoid rationalizing decisions and instead rely on a values-based approach. Governments have a role to play in setting the rules of the game, and in intervening as a last resort. However, the public sector should not try to replace private sector decision-making.

    Session Panellists


    Eckhard Cordes

    , Chairman of the Management Board and Chief Executive Officer, METRO, Germany

    Timothy P. Flynn

    , Chairman, KPMG International, USA

    John Monks

    , General Secretary, European Trade Union Confederation (ETUC), Brussels

    Ferit F. Sahenk

    , Chairman, Dogus Group, Turkey; Young Global Leader

    Ruben K. Vardanian

    , Chairman of the Board and Chief Executive Officer, Troika Dialog Group, Russian Federation; Young Global Leader; Global Agenda Council on the Future of Russia

    Moderated by

    Richard W. Edelman

    , President and Chief Executive Officer, Edelman, USA; Global Agenda Council on Marketing & Branding
     
    Disclosures
    This summary was prepared by Ben Skinner. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.

    Copyright 2010 World Economic Forum
    No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of the World Economic Forum.

    Thursday 28 January

    Keywords: trust, financial crisis, corporate leadership, governance, regulation

    Recommended reading for: Young Global Leaders, CEOs, Civil Society Leaders, Women Leaders, Media Leaders


     

Speakers

  • Timothy P. Flynn Timothy P. Flynn

  • Ferit F. Sahenk Ferit F. Sahenk
    Chairman, Dogus Group, Turkey

    Bachelor's in Marketing and HR, Boston College; Graduate, Owner-President Mgmt Programme, Harvard. F...

  • Ruben K. Vardanian Ruben K. Vardanian
    Entrepreneur and Philanthropist, VB Partners, Russian Federation

    Graduate, Moscow State Univ.; postgraduate studies, INSEAD, Harvard Business School, Yale Univ. and ...

  • Eckhard Cordes Eckhard Cordes
    President, Committee on Eastern European Economic Relations, Germany

    1974, MBA, Hamburg Univ.; PhD. 1977, with Daimler-Benz incl.: 1995-96, SVP, Corp. Develop., Corp. St...

  • John Monks John Monks

Moderated by

  • Richard W. Edelman Richard W. Edelman
    President and Chief Executive Officer, Edelman, USA

    BA and MBA, Harvard. Member of the Board: Ad Council; Atlantic Council; Children's Aid Society; Nati...