Archive

Archive for the ‘Risk’ Category

May
01

That’s a brash statement, but the facts are the facts. One of the most enlightening moments of my ten-year career leading TAA-TAW came early when a CEO of a large public company said to me “Trust, I never thought about it, but I like that word.” And that statement is why most companies suck at trust.

The daily news discussion of institutional breaches of trust should raise some eyebrows in Boards and C-Suites, but there is little evidence that it does. In public companies, the reasons why are rather simple. The Board and CEO are unwilling to adopt trust-building as a long-term strategy because it may, in the very short-term, impact:

  • Quarterly earnings
  • Wall Street “guidance”
  • Shareholder value
  • Their compensation and tenure

And they are not willing to sacrifice any of these, not even for one quarter.

Some other reasons why leaders in both public and private companies, suck at trust may include:

  1. They were appointed to their position for the wrong reasons. Former fraternity brothers and college lacrosse teammates don’t always make the best CEOs.
  2. They don’t know what matters to the people they lead, and some simply don’t care.
  3. Their well-written mission and vision statement is not practiced. We’re committed to the highest standards of integrity, transparency, and principled performance. We do the right thing, in the right way, and hold ourselves accountable. (Wells Fargo Vision and Values)
  4. Their legal and compliance team sets the ethical barometer, doing only what is “legal” as opposed to what is “right.”
  5. They believe that crisis repair is less costly than building long-term trust. They will not speak publicly about their organization’s values, ethics, integrity or trust-building until after the breach.
  6. They have never set aside a budget for trust because it is mistakenly viewed as a soft skill.

Industry is not destiny nor is any company perfect. But when the Board and the CEO suck at trust, the chances are that all the employees will too. That’s too bad for the company, especially since the business case for trust continues to be proven.

If you are a Board member, director or CEO interested in elevating trust in your organization, please read the latest issue of TRUST! Magazine.

If you work in any organization of any size and are interested in elevating trust, please read our recently released global TAP principles. They are now available in 5 languages.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. A former consultant to McKinsey & Company, she also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com

or contact barbara@trustacrossamerica.com

Follow us on Twitter @BarbaraKimmel and @TapIntoTrust

You may also join our Constant Contact mailing list for updates on our progress.

Copyright (c) 2018, Next Decade, Inc.

 

 

 

Mar
25

 

Did Mark Zuckerberg breach trust? 

Facebook won the “breach of trust award” last week, but was it justified?

If you are a Facebook user, have you read the company’s data policy? Perhaps doing so would have elevated your awareness of the risks involved in using this popular social media tool.

Have you ever taken one of those free “silly” Facebook quizzes? Did you think they were being provided for your amusement, especially in cases where the user was paid to complete it?

A recent opinion piece in the Washington Post raised the following points?

Those who enter the ecosystem of social networking should not suddenly be shocked that information is being shared.

This transfer of data to a third party (Cambridge Analytica) broke Facebook’s internal policies. In 2015, Facebook found out, removed the app and demanded the data be destroyed. 

However, users must be realistic. Social media platforms are in business to share. Anyone who spends time browsing online will soon discover hidden sinews that connect each click.

The Washington Post article can be read at this link.

I’m all for elevating trust and the first to admit that this example has me thinking twice. Did Facebook make mistakes by not ensuring that the data was destroyed. Yes. But perhaps this was as much a learning experience for Mark Zuckerberg as it was for Facebook users. After all, no company (or leader) is perfect. Understanding the risks, maybe too much trust was extended by Facebook’s users.

Did Zuckerberg breach trust? What do you think?

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. A former consultant to McKinsey & Company, she also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com

or contact barbara@trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Copyright (c) 2018, Next Decade, Inc.

 

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Mar
22

 

Our ongoing research at Trust Across America points in the direction that over time trustworthy public companies outperform their peers and the “markets.” This relatively small universe of well-governed companies goes beyond just meeting the needs of its shareholders to recognizing the importance of all its stakeholders.

Why Does this Make Sense?

Based on numerous studies high levels of trustworthiness are correlated with:

  • Ethical leadership
  • Happy employees and lower turnover
  • Faster decision-making
  • Higher innovation
  • Better community engagement
  • Decreased risk of corporate crisis

to name just a few benefits. And all of these factors impact the long-term bottom line.

Every year since 2012 Trust Across America has publicly announced its “Top Ten Most Trustworthy Public Companies” via an annual article on our blog. The following table displays the current cumulative returns of the companies selected each year vs. the S&P 500 since the date of the blog publication.

FACTS(R) Framework Annual Returns “Top Ten”

 

Note: FANG companies have never appeared in any of the “Top 10” selections.

 

How are these Companies Chosen?

In 2010 Trust Across America introduced the FACTS® Framework, a comprehensive unbiased barometer of the trustworthiness of America’s largest 2000 US public companies. The Framework (based on 5 equally weighted indicators) identifies companies whose leadership has intentionally chosen to govern in a manner that goes beyond doing just what is legal to choosing what is right in meeting all stakeholder needs. Now in its 8th year the FACTS® Framework is the most comprehensive and data driven ongoing study on this subject. We analyze companies quarterly and rank order showing trends by company, sector and market capitalization.

Whether one calls this great culture, high integrity “ESG,” or simply trust, the business case has been made. Leaders who choose to ignore trust are setting themselves up for not only a crisis, but a sudden decline in their stock value. Just ask Mark Zuckerberg.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. A former consultant to McKinsey & Company, she also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com

or contact barbara@trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Copyright (c) 2018, Next Decade, Inc.

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Mar
07

 

At Trust Across America-Trust Around the World we remain steadfast in our belief that trust is not a soft skill, nor should it be taken for granted. It is a tangible asset that impacts the bottom line.

Many of our colleagues believe that trust is a top down function, starting at the Board and flowing down through the organization. This means that both the Board and C-Suite must be trustworthy in order for their stakeholders to trust them.

We asked our Trust Alliance members and Top Thought Leaders to weigh in and the following are some “best practices” for elevating trust on both the Board and in the C-Suite.

 

To earn trust, an enterprise must have a strong corporate character – the unique differentiating identity that expresses its essence. Boards should be focused on – and demand management accountability for – the factors that contribute to corporate character. They include mission, purpose, values, culture, strategy, business model and brand.

Roger Bolton is the president of the Arthur W. Page Society

 

In order to ensure your corporate viability over time, and to effectively build trust with all stakeholders, it is crucial that strong alignment exists between your business agenda and societal expectations.  As captured in the popular line from Fiddler on the Roof, “on the other hand, there is no other hand” – running your enterprise in the face of societal expectations just won’t cut it.  Not anymore.  

Douglas Conant is the Founder & CEO of Conant Leadership

 

Just handling problems as they arise isn’t enough. The Conference Board calls for being proactive about business integrity and compliance critical for senior management, and even more so for boards of directors. If we manage corporate integrity based on reacting to problems, by the time we react, the problems are usually very difficult to manage. Being proactive about corporate integrity keeps CEOs and Boards focused on prevention and not cleanup.

Linda Fisher Thornton is CEO of Leading in Context LLC

 

We’ve all seen the press release. It goes something like this:

“We regret that the actions of a single rogue employee, Mr. BadGuy, were contrary to the values of this company. Our long ­established principles of integrity, honesty, truth, motherhood, and apple pie have been offended by the scandalous acts of Mr. BadGuy. We condemn the actions of Mr. BadGuy. Mr. BadGuy has left the building.”

In reality, the Rogue Employee excuse serves as an enabler, allowing Boards and CEOs to avoid asking tough questions like “why did our compliance program fail to detect or prevent this misconduct?” and “what failures in our culture and by our management allowed this problem to develop?”

When trouble knocks, compliance-savvy companies should retire the Rogue Employee excuse and instead enquire more deeply within, before others compel them to do so.

Donna Boehme is Principal, Compliance Strategists

 

Kill the “evening-before” executive team or board dinner. Instead, take a small group of front-line or mid-level employees to dinner in an informal setting, without the presence of other corporate executives. People are forthcoming, thoughtful, and engaging (to say nothing of appreciative).

Sign up for those “Google Alerts” or other independent news alerts to keep abreast of what others are saying or hearing or reading about the organization.

See the entity through the eyes of a new employee, be it via sitting quietly through a live new-employee orientation or its online equivalent.

Robert Galford is a Managing Partner of the Center for Leading Organizations

 

A company that wants to build trust should listen to the public dialogue about itself and its industry, identify what drives perceptions, and share information throughout the organization to influence decision-making.

What the organization says about itself: The company’s leaders and spokespeople should articulate (authentically) the positive impact their work has on society. In times of crisis they should express empathy and commitment to resolving the situation.

People expect organizations to be savvy about the conversation going on around it. Organizations that are blind to the dialogue, and only communicate outward are unlikely to build and maintain the trust required to be a respected and trusted business in the modern world.

Linda Locke is a Senior Vice President at Standing Partnership.

 

Boards no longer merely monitor the activities of a CEO and a firm. They can and should lead certain functions for the firm from defining the desired culture to involvement in strategy development. They can be a sounding board for the CEO on the lonely, difficult decisions he or she sometimes faces, especially in a time of crisis. But this mind-flipping attitude change can only be based on the board and CEO viewing each other as trusted allies.

Bob Vanourek is a former public company CEO and the founder of Triple Crown Leadership

 

Best advice: boards must develop their own robust crisis plans prior to any crisis. They must enumerate what kinds of actions will be taken for different issues: their crisis strategies and philosophies, the speed at which they will work, and who on the board will be designated to play first string, even if — especially if — the Chair or CEO is implicated in some way. 

Reputation is becoming one of the top priorities of corporate boards. The best way to protect reputation, and trustworthiness, is to plan before any crisis hits, adjust strategies in real time to fit the specifics of a crisis, and then for the board to execute its plan fearlessly. 

Davia Temin is the CEO of Temin & Company

 

Three prevailing archetypes of board dysfunction: the ego-driven board, the polite surrender board, and the micromanaging board. The protocols for authentic conversation, which require the right conditions for trust to develop, include:

  • Sufficient information and understanding to ask the right question.
  • A safe space that protects privacy and rejects behaviors to intimidate, ridicule, or insult.
  • Enough time to thoroughly explore systemic issues without jumping to conclusions.

The real question is: How long can an organization afford an unproductive board? In a fast changing world, trust is the key to good guidance.

Alain Bolea runs Business Advisors Network

 

Look for the flavor of “we versus they” in the wording of e-mails.  Whenever senior managers are writing to each other about an upcoming BOD meeting or other interface, are the pronouns showing a schism or do they indicate mutual support?  When BOD members interact online, does the evidence show a typical frustration, like if only “we” can get “them” to do thus and so.

If you know how to read in between the lines of e-mails, the signs are easily spotted long before a face-to-face meeting.  That can lead to corrective action before polarized attitudes are entrenched.

 Bob Whipple is CEO of Leadergrow Inc

 

Finally, consider adding some gender diversity to your Board. Our most trustworthy public companies are doing just that, and the results speak for themselves. A closer analysis of our publicly released “Top 10” companies over six years reveals that the average percentage of women on boards is high.

Barbara Kimmel, CEO Trust Across America

Do you have any questions? Please direct them to barbara@trustacrossamerica.com.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Copyright (c) 2018, Next Decade, Inc.

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Feb
13

 

Did you know that the average lifespan of a public company is now less than 20 years, down from 60 years in the 1950s? While some might argue that disruptive technology is to blame, that’s a smoke screen for the real culprit. After all, high trust companies are great innovators.

Today’s pervasive low trust business environment might be the #1 risk to every company. Without trust as a foundation, the chances for long-term survival are slim to none, and crises are a sure bet.

While trust holds the key to long-term success  it remains the single most overlooked, yet one of the simplest business strategies to implement.

How many of these low trust warning signs are present in your organization?

  1. Trust is taken for granted and viewed as a soft skill. It is never discussed.
  2. There is no Chief Trust Officer or keeper of the culture. Instead, the Chief Compliance Officer wields the “big stick” and remains the laughing stock of the employees.
  3. corporate credo or core values are nonexistent, or the one in place is no more than Kumbaya “words” on the corporate website.
  4. Strategies to elevate organizational trust have never been discussed let alone defined, shared or agreed upon.
  5. Leadership is focused on survival and short-term profitability. In fact, compensation is tied to quarterly earnings.
  6. The leadership team lacks leadership skills and never speaks publicly without “legal” sign off. (Great college lacrosse players don’t necessarily make trustworthy leaders.)
  7. There is not a single woman in sight on the executive leadership team.
  8. A well-defined hiring strategy has not been implemented resulting in cultural misalignment, confused and non engaged employees.
  9. Employee turnover is high but no one asks “Why?”
  10. Board members are “Yes men” for the CEO, and “Yes” they are all men.

How many of these trust “fails” do you see on a daily basis? What’s your guess on the longevity of your business?

Want to learn more about building organizational trust? Our website provides an endless number of tools and resources for elevating organizational trust. Many of them are free. Read a book, join our Trust Alliance, find an hour to discuss a Case Study, read the Trust Across America blog.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

Join our Constant Contact mailing list for updates on our progress.

Copyright 2018 Next Decade, Inc.

 

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Nov
20

In 2010 Trust Across America introduced the FACTS® Framework, a holistic unbiased barometer of the corporate integrity of America’s largest 2000 US public companies. The Framework identifies companies whose leadership is going beyond doing what is legal to choosing what is right in meeting all stakeholder needs. This, by order of magnitude, is the most comprehensive and data driven ongoing study on this subject. We analyze quarterly and rank order by company, sector and market capitalization. We are particularly interested in tracking individual companies and sector trends over time.

F   Financial Stability and Strength: assesses the company’s financial and market performance. Companies that maintain high rankings have been shown to have better stock performance, with lower volatility over time.

A   Accounting Stability: analyzes the company’s transparency of earnings and quality of reporting. Companies ranking highly over time have conservative ratings and are shown to have less regulatory actions and restatements.

C   Corporate Integrity: assesses the company’s overall governance risk, board independence and composition, and compensation policies and risks. The focus is on real-world value and risk, not just “check-the-box” practices.

T  Transparency: analyzes the company’s financial and nonfinancial clarity including disclosure, environmental management and climate change, diversity, human rights and workforce composition.

S   Sustainability: assesses the company’s environmental, workforce policies, community impact and human rights performance among other metrics.

 

Trustworthy public companies are rewarded in the long-term. Click To Tweet They not only avoid expensive crises but also have the benefit of stakeholder support and longevity.

During the three-year period from February 2013-February 2016, and according to FACTS® Framework audited live returns, America’s most trustworthy public companies outperformed the S&P 500 by 1.8x. The composite results translate to 16.7% annualized for FACTS® vs. 9.5% for the S&P 500.

Almost two years since this chart was created, Trust has continually proven to be a successful business strategy that may significantly impact a company’s profits over the long-term. Click To Tweet

Our Corporate Integrity Monitor provides additional insights into America’s most trustworthy companies.

Interested in learning more?

Buy our books

or contact Barbara Kimmel: Barbara@trustacrossamerica.com

 

 

 

 

Copyright © Next Decade, Inc. All Rights Reserved. FACTS® is a service mark of Next Decade, Inc. in which Barbara Brooks Kimmel is the founder and CEO. Jordan Kimmel and Barbara Brooks Kimmel are the Cofounders of Trust Across America.

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Sep
12

Photo courtesy of trepscore.com

Are the following low trust warning signs present in your company?

  • The Board emphasizes short-term financial results over long-term value creation.
  • CEO values are unknown or unclear and never communicated.
  • The C-Suite operates in individual silos.
  • Management ignores trust as a proactive business strategy or a competitive advantage.
  • The largest departments are legal and compliance with hyper focus on risk.
  • HR is lacking a “values driven” hiring framework hindering the construction of a talented and engaged team.
  • Transparency has taken a back seat to secrecy and closed doors, and employees are always the last to “find out.”
  • Layers of bureaucracy and “rules” slow every decision to a crawl.
  • Failure is punished so passion and innovation are low or nonexistent.
  • Stakeholder activism is increasing.

What other low trust warning signs would you add?

Trust Across America has been researching and measuring the trustworthiness of the 1500 largest US public companies for almost eight years via it’s FACTS® Framework. This, by order of magnitude, is the most comprehensive and fact-based ongoing study on this subject. We analyze quarterly and rank order by company, sector and market capitalization. We are particularly interested in tracking individual companies and sector trends over time.

 

While Trust Across America continues to make the business case for trust, it remains quite common for warning signs to be overlooked or completely ignored.  Address the “trust” danger signs before distrust becomes the norm, or the next crisis comes knocking at the CEOs front door.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com or contact Barbara Brooks Kimmel, CEO and Cofounder

Barbara@trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Purchase our books at this link

Copyright 2017, Next Decade, Inc.

 

 

 

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Sep
02

Photo courtesy of psychologicalscience.org

How frayed is trust in your organization? As a business leader, it’s your responsibility to repair it before the rope snaps and a crisis occurs.

Five Trust-Building Resources for Business Leaders

  1. Read a book on building trust
  2. Purchase a DIY kit called Trust in a Box
  3. Receive cutting edge advice by joining our Alliance
  4. Read our White Paper: The State of Trust in Corporate America
  5. Hold a workshop

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com or contact Barbara Brooks Kimmel, CEO and Cofounder

Barbara@trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Purchase our books at this link

Copyright 2017, Next Decade, Inc.

 

 

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Aug
12

A customer service representative at a major health insurance company recently told me that HIPAA prevented him from disclosing whether an application submitted for one of my children had been received by the company. I sensed he had misinterpreted HIPAA whose purpose is to safeguard medical information, but as he insisted, he was just “following the rules.” I thanked him for his time, hung up, and called back to the same department. The second customer service rep gave me the information I needed without hesitation.

Whether an employee or a customer, I’ll bet you’ve heard these statements (excuses) or used them yourself more than once.

  • I need to get approval to do (or say) that.
  • I need to clear this through compliance.
  • I need permission before you can quote me.
  • I can’t help you without approval.
  • I’m just following the rules.
  • I apologize for your frustration.

Perhaps it’s time for business leaders to take a few minutes to understand the relationship between trust and approval.

Merriam-Webster provides the following definitions of approval:

Definition #1: The belief that something or someone is good or acceptable: a good opinion of someone or something. 

Definition #2:  Permission to do something: acceptance of an idea, action, plan, etc.

Focusing now on Definition #2, how many employees are constrained by “permission” in your organization? Have you considered how this impacts:

  • Speed of innovation
  • Decision-making
  • Employee engagement
  • Cost

Every time an employee needs approval to say or do something, the “approval” process impedes the outcome. In fact, the process may be so daunting, that employees choose to take the “easy” road, never creating anything new or suggesting a novel idea;  or as in the story above, checking with someone else when they clearly do not understand the company’s daunting “rules.”

As a business leader, have you considered how your customers are impacted by the “approval process” in your organization, or how the company’s actions:

  • Waste customer AND employee time
  • Create hard feelings
  • Lower customer retention
  • Damage reputation and elevate risk
  • Raise costs

As a business leader, what if your focus shifted from “approval” or rule enforcement to elevating stakeholder trust?

The most progressive and successful CEOs and their Boards have redirected their attention to crafting long-term vision and values statements and/or Codes of Conduct, not driven by legal and compliance, but by their two most important stakeholders, their employees and their customers. (The “credo” etched into the wall at corporate headquarters does not even begin to satisfy this requirement.) The entire staff, beginning with the Board and CEO, must vow to live their values every day, and ensure that employees understand that any “values violation” will result in immediate termination. Just imagine the innovation, speed of decision-making and empowerment that would result from this cultural transformation, not to mention the ultimate cost savings and impact on profitability.

During the editing process of our book Trust Inc. I reviewed the websites of many large public companies with the goal of including an Appendix brimming over with examples of well-crafted vision statements. This became a difficult and disappointing task as the handful identified could not be included in the book without “approval” from the respective company’s legal department, which would have meant a lengthy delay of the book’s publication. Instead, I created a “work around” by eliminating the company name. What a lost opportunity for all!

If organizations spent more time building values instead of layers of legal teams and compliance departments, the word “approval” would start to look more like Merriam-Webster’s first definition:

The belief that something or someone is good or acceptable: a good opinion of someone or something. 

And “approval” would be replaced with trust.

The most progressive business leaders have joined our Trust Alliance to ensure that they never miss an opportunity to learn about elevating organizational trust.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com or contact Barbara Brooks Kimmel, CEO and Cofounder

Barbara@trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Purchase our books at this link

Copyright 2017, Next Decade, Inc.

 

 

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Aug
04

Courtesy of mmo-champion.com

Which of these companies do you think has the higher integrity culture, Coca Cola or PepsiCo?

Let’s start by defining what we mean by a high integrity culture. A high integrity culture is…

  • NOT the credo written on the wall in the corporate headquarters
  • NOT a CSR program or how philanthropic a corporation chooses to be
  • NOT solely what employees think of their organization

A high integrity culture…

Has a high integrity VISION that defines its purpose, and that vision is practiced and reinforced daily.

Has high integrity VALUES that serve not only as a guideline but as a PRACTICE for all employees. HR supports these values at all times by hiring PEOPLE who share the corporate values. In fact all silos play a role in maintaining the high integrity values.

Starbucks offers an excellent example of high integrity values:

  • Creating a culture of warmth and belonging, where everyone is welcome.
  • Acting with courage, challenging the status quo.
  • Being present, connecting with transparency, dignity and respect.
  • Delivering our very best in all we do, holding ourselves accountable for results.
  • We are performance driven, through the lens of humanity.

Has high integrity LEADERSHIP who understands and meets the NEEDS of all its stakeholders, not just shareholders through its consistent practice and reinforcement of its high integrity vision and values.

So who has the higher integrity culture Coca Cola or PepsiCo?

Trust Across America has been measuring the corporate culture of public companies for over seven years through its FACTS Framework. Unlike other culture surveys that rely heavily on employee input, FACTS (an acronym) measures the quantitative indicators or dimensions of high integrity- Financial stability, Accounting conservativeness, Corporate governance, Transparency and Sustainability. And in our analysis Pepsi wins. Out of the five indicators, PepsiCo scores significantly higher in three.

While relying on employee surveys alone may be helpful in measuring culture, surveys don’t tell the full story and can be easily gamed. In fact, in the case of Coke and Pepsi, their Glassdoor reviews, for example, are almost identical.

Why should a high integrity culture matter?

In our ongoing research at Trust Across America, all signs point to high integrity cultures being more profitable. To all those companies whose leaders think culture is soft, intangible, immeasurable and/or doesn’t matter, you are ignoring the FACTS at your own risk. And perhaps that’s why Pepsi scores higher than Coke. It may boil down to Indra Nooyi’s leadership priorities.

You can read more about our Corporate Integrity Monitor findings at this link.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also runs the world’s largest global Trust Alliance and is the editor of the award- winning TRUST INC. book series. In 2017 she was named a Fellow of the Governance & Accountability Institute, and in 2012 she was recognized as one of “25 Women who are Changing the World” by Good Business International. She holds a BA in International Affairs from Lafayette College and an MBA from Baruch at the City University of NY.

For more information visit our website at www.trustacrossamerica.com or contact Barbara Brooks Kimmel, CEO and Cofounder

Barbara@trustacrossamerica.com

You may also join our Constant Contact mailing list for updates on our progress.

Purchase our books at this link

Copyright 2017, Next Decade, Inc.

 

 

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