How business leaders have restored their credibility

The World Economic Forum has long been seen by its detractors as an elite global club, so its critics will find itironic that the topic of this week’s WEF conference is “working together, restoring trust.”

With the flagship in-person Davos 2022 event postponed until the summer, there will instead be a series of “State of the World” sessions online, bringing leaders together to focus on shaping solutions to the world’s most pressing challenges. The conference is being billed as the first global opportunity for business, government and civil society to set the agenda for a sustainable recovery in the post-pandemic world.

Leaders delivering special addresses include Narendra Modi, Kishida Fumio, Scott Morrison and Naftali Bennett, the prime ministers of India, Japan, Australia, and Israel, and presidents Joko Widodo and Paul Kagame of Indonesia and Rwanda. Other speakers include Kristalina Georgieva, managing director of the International Monetary Fund, US Treasury Secretary Janet Yellen, and Haruhiko Kuroda, governor of the Bank of Japan.

Skepticism aside, the topic of trust is an essential one to address given populist political surges, rising economic inequalities and the “post-truth” phenomenon. And with the worst of the pandemic now apparentlyover in much of the developed world, this could be the right moment to turbocharge this conversation in 2022.

The goal of rebuilding trust is not just an important end in itself. It is also key, indirectly, to rebuilding the world’s social and economic systems in the wake of the coronavirus crisis with forward-looking, fair and sustainable solutions for a post-pandemic world.

Opinion surveys for decades have shown that trust has eroded in many elites and institutions. Moreover, the standing of a number of governments, especially in the West, has been further set back by perceived mishandling of the pandemic.

However, while trust in many politicians continues to weaken, some surveys simultaneously point to a rebound in positive perceptions of business, on measures including competence and ethics. This is interesting because the opposite phenomenon, declining confidence in corporates, especially amongst the young, was one of the key legacies of the international financial crisis that began about a decade and a half ago.

Growing distrust in business was shown not just in numerous opinion polls, but also by protests such as the Occupy movement, which came to international prominence in Wall Street in 2011 with its campaign against social and economic inequality. The Occupy demonstrations, often driven by younger people, spread to about1,000 cities in over 80 countries.

One manifestation of this rising tide of distrust was that stakeholder belief in what many corporates said and did was undermined. This posed new hurdles for companies looking for innovative ways to reconnect with people and communities, especially in a world where there had already been a longstanding backlash againstthe private sector on issues such as executive pay, international trade and globalization.

Many businesses have sought to rebuild trust since then through tried and tested techniques such as creating good new jobs and investing in the economy, while paying workers fair wages and benefits. Beyond this, a growing number of companies have used new ideas to restore credibility, and some of this may now be paying off in terms of public opinion.

One example is founded on the apparent paradox that despite growing distrust of business, many people nevertheless expect the private sector to play a greater role in society and tackle the range of grand challenges facing the world, from climate change to growing economic inequality.

Of course, companies have long had sustainability and responsibility programs to address such issues. However, the challenge — and opportunity — is greater now, giving rise to what leading Harvard academic Michael Porter has highlighted as a new way for companies to secure competitive advantage by creating “shared value” for society as well as for shareholders.

Perhaps the key idea behind this concept is that corporate competitiveness and the health of society at large are mutually dependent and reinforcing. Thus, capitalizing on the connections between societal and economic progress, tackling challenges ranging from climate change to the obesity crisis in many countries, can drive growth for years to come.

Taken together, the innovation that many businesses have shown the past 15 years in reconnecting with society may contain insights for wider institutions and elites too. This is not just an academic exercise; the post-pandemic challenges facing the world are massive, and will best be addressed with greater cohesion and trust right across the private, public and third sectors in a massive, integrated recovery mission.

• Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics