Trust Across America-Trust Around the World™

What do low integrity and trust cost an organization and the economy? The research studies cited below should give our readers some insight:

• Gallup reports that employee engagement was more or less stagnant in 2015, (over 17% actively disengaged.) In 2014 less than one-third of US workers were engaged in their jobs, with millenials the least engaged, and this is costing the US economy $450-550 billion a year, which is over 15% of payroll costs. (Gallup, 2015)

• The Association of Certified Fraud Examiner’s survey participants estimated that the typical organization loses 5% of its revenues to fraud each year. Applied to the 2011 Gross World Product, this figure translates to a potential projected annual fraud loss of more than $3.5 trillion. 2012 Global Fraud Study

• According to The Economist Intelligence Unit (2010), 84% of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only 12% of them reported doing anything about this problem.

• The cost of Federal Regulations is approaching $2 trillion annually according to a study by the Competitive Enterprise Institute.

• According to a recent report by PwC the U.S. held its position as the top location for innovation, with in-country R&D spending of $145 billion in 2015. However, other countries (i.e., China) increased their R&D spending by greater proportions than the U.S. which caused it to lose some of its relative advantage.

• Volkswagen lost 20% of its stock value after the emissions scandal and Target’s profits fell 34.3% after it’s data breach.

• A study by Murphy, Shrieves and Tibbs called “Determinants of the Stock Price Reaction to Allegations of Corporate Misconduct” finds that allegations of misconduct are accompanied by statistically significant control-firm adjusted declines in reported earnings, increases in stock return variability, and a decline in concordance among analysts’ earnings estimates.”

• In a 2008 study by Karpoff, Lee and Martin called “The Cost to Firm’s of Cooking the Books,” the authors find The penalties imposed on firms through the legal system average only $23.5 million per firm. The penalties imposed by the market, in contrast, are huge.

• The PR firm Edelman finds in their 2016 “Trust Barometer” that nearly one in three employees don’t trust their employer. And more than two thirds feel that CEOs are too focused on short-term performance. As a result, employees are far less likely to say positive things about the company they work for.

The trust gap not only negatively impacts a company’s revenue, market share, brand reputation, employee engagement and turnover, stock price, and bottom line profitability, but every facet of society.

What happens when integrity & trust increase?

Find out in our new white paper: The State of Trust in Corporate America 2016. Request it here.

Copyright (c) 2016 Next Decade, Inc.

Executive Summary of White Paper Recently Published

by Trust Across America-Trust Around the World

Building a trustworthy company will improve both its profitability and organizational sustainability. Supporting this statement is a growing body of evidence showing an increasing correlation between trustworthiness and superior financial performance. Our 2016 report attempts to provide content and context to place trust in the center of more business conversations, to answer the following questions and dispel the myth that integrity and trust are “soft” skills.

• Why do trust and integrity matter?
• Can they be measured?
• Are they profitable?
• Which sectors are the most trustworthy?
• Is industry destiny?
• What are the costs of low trust and integrity and why do they matter as hard currencies?
• Which companies are some of the most trustworthy and why?
• How can companies become more trustworthy?

Integrity and trust should start at the top and flow down through the organization. They are not CSR, compliance, HR or leadership “programs” but rather an intentional holistic business strategy adopted by leadership and practiced daily. Vanishing are the days of low transparency, “short termism” and maximization of shareholder value at the expense of other stakeholders.

As trust breaches continue to make the headlines across many major institutions and societies around the globe, organizations that choose integrity and trust as intentional strategies will continue to outperform their peers.

Who will find value in reading this paper?

• Business leaders
• Boards of Directors
• Associations
• Investors
• Communications and Investor Relations
• Corporate responsibility officers
• Regulators
• Politicians
• NGOs

Please register here to request access to the full paper.

Barbara Brooks Kimmel is the CEO and Cofounder of Trust Across America-Trust Around the World whose mission is to help organizations build trust. Now in its seventh year, the program’s proprietary FACTS® Framework ranks and measures the trustworthiness of over 1500 US public companies on five quantitative indicators of trust. Barbara also runs the world largest global Trust Alliance, is the editor of the award winning TRUST INC. book series and a Managing Member at FACTS® Asset Management, a NJ registered investment advisor.

Copyright © 2016, Next Decade, Inc.

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