Trust Across America-Trust Around the World™

As the Executive Director of Trust Across America, I often find myself discussing the difference between being legal and being ethical. The legal side of the discussion is pretty easy to explain. If you and/or your organization comply with the law, you are meeting your legal requirement. Being ethical- not so easy to describe. It’s going beyond what’s legal to “doing the right thing” and I’ve learned there is no standard for the “right thing.”

In reading today’s headlines, I may have found a perfect case study for legal vs. ethical, right in my own backyard. Talk about not “getting it!” The story has do do with NJ taxpayers paying dozens of school superintendents twice via a paycheck and a pension. It’s called “double-dipping” and it’s perfectly legal. But is it ethical? You can read the full article here.

bit.ly/12m0p3Q

TRUST ACROSS AMERICA™ RELEASES FIRST FINDINGS FROM ITS STUDY OF TRUSTWORTHY BUSINESS PRACTICES IN PUBLIC COMPANIES

While there may be a continuing and complex trust crisis in America, our research shows that there is a direct relationship between business performance and trustworthy behavior. And while a universal definition of trust may not exist, it’s not really a problem,—it’s just the way things are. We love to put precise metrics in place that describe and explain, in linear and causal terms, things like human behavior. But reality doesn’t always cooperate. And because what can’t be measured also gets overlooked, trust, which is absolutely critical in business relationships, needs measuring.

A 2008 paper written by the Economist Intelligence Unit entitled “The Role of Trust in Business Collaboration” concluded with the following statement:

“Even though best-practice corporate governance has been on the corporate radar for some time now, it seems that the trust element of governance, despite being so closely linked to ethics, has yet to become a business standard.”

We believe that many important concepts cannot be reduced to a single metric, and that is certainly true for trust. However, what can be defined and measured are various contributory components of trustworthy behavior in business—factors that we can all agree are definitely somewhere in the trust neighborhood. And when these factors are evaluated and aggregated, there are some encouraging results about companies that somehow seem to be “doing the right thing.” We may not be able to precisely measure trust; but that doesn’t mean we can’t rate it, test it, evaluate it, and above all—manage it. What we have recently done is removed the ‘yet’ out of the Economist’s description.

In 2007 we set a goal of developing a rigorous approach to better understanding and evaluating trustworthy business practices. We began laying a foundation for a trust ecosystem, and Trust Across America™ (TAA) was hatched. Through our professional relationships, LinkedIn group, and our radio show, we have spoken to dozens of academic and corporate experts and consultants across the wide range of specialized silos relating to organizational trust- ethics, integrity, reputation, ESG, CSR, accounting, and sustainability to get their feedback on this elusive concept of trust. From this collaborative effort, we have developed a methodology that we think approximates the most holistic and comprehensive definition and measurement of trustworthy corporate behavior to date. We named it FACTS™. It allows us to provide meaning, definition and measurement to both the business and behavioral side of trust.

FACTS™ is an acronym. It stands for:

Financial strength and stability
Accounting controls
Corporate governance and community impact
Treatment of Stakeholders and Transparency
Sustainability

We ran the FACTS model again historical public data for thousands of public companies from 1998-2009, and eliminated those that did not have complete data. In essence, our methodology analyzes hundreds of data points from three independent providers, and with equal weighting, arrives at a cumulative FACTS™ trust score for almost 2000 of the largest publicly traded companies. Currently, thirty nine companies reach the Gold Standard of 50 points or more in each of the FACTS data categories.

Some other noteworthy findings from this study:

•The company with the highest trust ranking (across sixteen sectors) is in the same industry as BP Global. We find this somewhat timely since it is a goal of TAA to have the most trustworthy companies share their best practices.

•The companies with the highest scores in all data categories come from six different industry groups, so no single industry dominates in the “trust” category.

•The retail sector has the highest average trust rating of the sixteen.

•When we rank the 1954 companies, the top 10% are almost evenly split between large and small (over and under $2 billion market cap).

•Only two hundred companies in the database scored above a “50” in sustainability efforts.

Over the next few weeks we will be populating the Trust Across America website Link to Website with the following material:

-An alphabetical listing of the names of all 1954 companies for which we have complete data.
-An alphabetical listing of the top 10% of all companies.
-Company specific and industry reports that will allow C-Suite executives to anticipate “surprises”, manage risk, and better protect their company’s reputation; provide a workable framework for enhancing organizational trust and reputation; and provide meaning, definition and measurement to both the business and behavioral side of trust..
-Reports for consumers and other professionals.
-Additional resources for public companies that wish to delve deeper into internal and external behavioral assessments.

We will also begin conversations with the media (both print and broadcast) about our findings and will start to contact some of the top companies for interviews and further involvement. Our mission is to highlight companies that are “doing the right thing”, refocus media attention away from the negative, and provide opportunities for companies to share best practices.

I look forward to your comments and feedback. The best initial method to communicate is via email: barbara@trustacrossamerica.com

Barbara Kimmel, Executive Director Read more…

TRUST ACROSS AMERICA™ MONTHLY UPDATE JULY 2010

A close family member likes to remind me that “Slow and steady wins the race”…as long as you are heading in the right direction. Our VISION is slowly and steadily reaching its lofty goal as our trust ecosystem continues to expand, and collaboratively we elevate the discussion and develop solutions for building a more trustworthy world.

Over the past month we have spent much of our time finalizing our study on trustworthy business practices in public companies. Look for a major announcement in August and a special newsletter explaining our methodology and some of our observations.

Our core programs continue to grow:

• Our LinkedIn Group called Trust Across America launched in mid-April. It’s a place for discussion, dialogue and debate on trustworthy behavior in business. Most of our members are thought leaders from academia, consulting and corporate America in the fields of ethics, trust, reputation, leadership, integrity, CSR, ESG, sustainability and impact investing. If you have not already done so, please join the group and take a minute to introduce yourself. Please invite a professional colleague to join the group as well.

• The Trust Across America Blog for July includes interviews with Brian Moriarty from the Business Roundtable Institute for Corporate Ethics; Jeffrey Seglin, the NY Times Ethics Columnist; Karen Mishra, a Michigan State Professor who, along with her husband Aneil, has spent the past twenty years studying trust; and Tony Simons a leadership and management professor at Cornell, and an expert in business trust and integrity. I also wrote a few pieces on how companies can damage their reputation through poor marketing and customer service, and you can follow my fender bender saga navigating the auto insurance industry. Our blog index has grown to almost forty covering trustworthy behavior in business from various viewpoints including ethics, trust, reputation, integrity, sustainability, ESG, CSR and leadership. Click on link

• Trust Across America Radio Show: We had a surprise visit from Jeffrey Hollender of Seventh Generation on July 21. We continue to be honored by the outstanding thought leaders who have appeared, and will be appearing on the show. All past shows are archived, so you can listen at your convenience: Click on Show Link
Our guests for the month of August, all leading experts in various aspects of organizational trustworthiness, include: (August 4) Steve Farber, the President of Extreme Leadership and author of Greater than Yourself; Paula Marshall the CEO of Bama Companies, a Malcolm Baldrige Award Winner and author of Finding the Soul of Big Business; (August 11) Fran Maier, the founder of Match.com and the President of TRUSTe that currently certifies the privacy practices of over 3,000 websites; Traci Fenton, the Founder and CEO of WorldBlu, Inc., whose mission is championing the growth of democratic companies worldwide. WorldBlu publishes the annual WorldBlu List of Most Democratic Workplaces™; (August 18) Bob Schoultz, Director of the Master of Science Program in Global Leadership at the University of San Diego; Art Stewart, a consultant, educator, and purveyor of a strategic framework – the ‘New Responsibility Paradigm’; (August 25) Nick Andrews, Managing Director North America for the Centre for Sustainability and Excellence; and Karen Mishra, a clinical professor in the Broad College of Business at Michigan State University. Karen’s research focuses on how organizations build trust with employees through internal communication.

• Consultant’s Collaborative Our Consultant’s Collaborative is growing. It is another opportunity for experts to highlight and share their knowledge with visitors to our site, as well as serving as a centralized internal and external resource for consulting, media and program referrals. We hope to expand the Collaborative to include professionals with expertise in Organizational Trust, Leadership, Ethics, Integrity, Reputation, Accountability, Sustainability, CSR, ESG, Governance/GRC and Impact Investing. Special programs are being developed for those who participate through enhanced listings. Click for Consultants Page

• Reading Room Looking for a book on organizational trust? Our Reading Room should be your first stop. Books are written by experts from corporate America, academia and consulting. We added several new titles for August. Click Here to Go to the Reading Room

We hope you will choose to get involved and stay involved in some of the following ways. Trust Across America is a collaborative effort. We cannot do this alone.

• Join our Linkedin group called Trust Across America. We have also started a group on Facebook by the same name but have not quite figured out what we will do with it!

• Be a guest on our radio show.Refer a colleague to appear on the show. Please have them send an email to
Barbara@trustacrossamerica.com with their expertise and contact information.

• Link your blog to our site – Follow the format on the existing blogs at the link below and send it back in an email-we will add your blog within a few days.

• Be listed in the Consultants Collaborative- Please email me for more information on various listing options. (Barbara@trustacrossamerica.com)

• Suggest a book for our Reading Room

• Collaborate in some way we have not yet considered.

Thank you for your interest in Trust Across America. We look forward to continuing to build our trust ecosystem and in providing valuable resources to both individuals and companies. Please feel free to forward this newsletter to others who may be interested.

Barbara Brooks Kimmel, Executive Director
www.trustacrossamerica.com
Copyright © 2010 Next Decade, Inc.

Barbara: Tell us a bit about your background, qualifications and expertise. If you have written a book, please provide the title.

Jeffrey: For many years, I was an editor at Inc. magazine when it was still based in Boston. When I was executive editor, I noticed that a curious thing occurred with the letters we received from readers. Whenever we would run a story that highlighted how an entrepreneur had cut some corners or played fast and loose with the truth to get ahead, we would get letters from readers who objected to us featuring such behavior on our pages. We’d run some of those letters and then in the next issue we’d get letters from other readers who took those who had a problem with the practices we features to task and claimed it was how you had to behave to succeed and grow a company. We found something fascinating there and that led to my writing of several features that focused on ethical issues company owners faced.

Shortly after several of these features ran, I was offered a year-long fellowship at the Center for the Study of Values in Public Life at Harvard University. I had done my graduate work at Harvard Divinity School years earlier. I spent the year of my fellowship there running a seminar on ethical decision-making in business (largely attended by business and divinity students) and completing my book, The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart. As I began the fellowship in September 1998, I also started writing a monthly business ethics column called “The Right Thing” for The New York Times. A collection of those columns appeared in book form as The Right Thing: Conscience, Profit and Personal Responsibility in Today’s Business. I have also written about a dozen other books on writing, marketing, banking, and other topics. In 2004, “The Right Thing” column became a weekly column syndicated by The New York Times Syndicate.

Barbara: Trust Across America’s mission is to rebuild trustworthy behavior in America, starting with public companies. Is ethical behavior a component of trustworthy behavior, or are they essentially the same?

Jeffrey: Trustworthy behavior can be one critical component of ethical decision making in business. But ethical decision making encompasses a broad range of elements that result in a final decision. Ethical decision making explores how someone walks through a tough decision. Trustworthiness can be an important character trait and certainly one that should be valued in business. But it in itself does not guarantee that someone will do the necessary work of making an ethical decision.

Barbara: Is the “trust” climate in corporate America improving or worsening? What actions will turn things around?

Jeffrey: Hard to say. There is a great deal of skepticism about honest behavior in business that heated up during many of the business scandals of 2002. The recent issues of safety with Toyota and oil spills with BP have not helped restore the public’s trust. The vast majority of business owners may indeed be trustworthy. But a handful of high profile cases of bad behavior can wreak havoc on public perception. When things go wrong, business leaders need to address issues head on if they expect to turn the situation around. They must come clean and make right what has gone wrong. Given that by the time things go wrong few can agree on what will make things right, this is no easy task.

Barbara: It seems that ethical corporate behavior has frequently taken second place to short term stockholder returns. Do you see companies shifting towards long termism and greater emphasis on all stakeholders?

Jeffrey: Such a shift will only be possible if stockholders don’t demand short-term rewards. Given the impatience of the markets, it’s hard to see how this will turn around fast. But boards should take the lead here and do what’s in the long-term interest of the company and all of its stakeholders…even if they know they might take a short-term hit.

Barbara: Please provide contact information.
The email for the column is rightthing@nytimes.com. My personal email is jseglin@post.harvard.edu.
Jeffrey L. Seglin
www.jeffreyseglin.com
jseglin@post.harvard.edu
rightthing@nytimes.com
617.824.8240 (Emerson)

Do you have any questions about this interview? Please don’t hesitate to ask.