Trust Falls

Trust is the invisible thread that holds societies together — binding people to their leaders, businesses, and the systems meant to serve them. Yet, that thread is fraying.

Trust is the foundation of any successful system — whether it's a business, a digital infrastructure, or an entire nation. A strong reputation creates resilience, attracts investment, fosters collaboration, and allows operations to run smoothly. Conversely, losing trust has immediate and lasting consequences: customers leave, investors pull back, and the ability to recover becomes increasingly difficult. This isn’t just about public perception — a damaged reputation can affect everything from regulatory relationships to supply chains.

The 2025 Edelman Trust Barometer reveals a troubling shift towards a grievance-based society, where economic anxieties and growing perceptions of systemic unfairness are eroding faith in once-reliable institutions. An OECD survey underscores this decline, showing that 44% of individuals across member countries report low or no trust in their national governments. In the United States, the numbers are even starker: Gallup reports that only 26% of Americans express confidence in their national institutions — a historic low. This crisis of confidence isn’t just a political or economic issue — it’s a societal one, shaping how people engage with their communities, their workplaces, and even each other.

The erosion of trust doesn’t stop at governments — it extends deeply into corporate communities, with profound consequences for businesses, society, and overall well-being.

For businesses, losing trust means losing customers, investors, and talent. People increasingly prefer brands that align with their values, and a single misstep can spark global backlash. Companies like Facebook (now Meta) faced this firsthand after privacy breaches shattered user confidence, leading to regulatory scrutiny and a damaged reputation. Similarly, Boeing’s 737 Max crisis not only cost billions but also raised doubts about the company’s commitment to safety over profit.

The consequences ripple outward to society. Corporations often provide essential services — from healthcare to energy — and when people no longer believe these entities operate in their best interest, it weakens social cohesion. Misinformation spreads faster, cynicism rises, and communities become more divided. Trust, after all, is the glue that holds markets and societies together. Without it, cooperation falters, innovation slows, and people retreat into echo chambers, further polarizing communities.

On a larger scale, trust erosion disrupts efforts to tackle global challenges like climate change and inequality. Businesses are increasingly expected to lead on these fronts, stepping in where governments fall short. When corporations lose credibility, so too does their ability to drive collective action — creating a vacuum where progress stalls.

The Unraveling

In the post-World War II era, trust in governments soared, particularly in Western democracies. The United States, for example, saw public confidence in leadership peak during the 1950s and 60s, driven by economic prosperity and ambitious projects like the space race.

The assassination of President John F. Kennedy in 1963 marked a pivotal moment in American history, one that not only shook the nation to its core but also began the slow erosion of public trust in governmental institutions. For decades, the event and its aftermath sparked widespread conspiracy theories and suspicions about the government's transparency and motivations. The official narrative, which placed the blame on a lone gunman, was met with skepticism by many, who felt the truth had been deliberately obscured or manipulated. This sense of distrust only deepened over the years as new questions emerged regarding the details of the investigation, the role of various agencies, and the political climate of the time.

This trust was further fractured with the Vietnam War and the Watergate scandal, which exposed corruption and deception at the highest levels of power.

The 1980s and 90s brought a wave of globalization and privatization. While many economies flourished, growing income inequality and financial crises — like the Asian financial crisis (1997) and Russia’s default (1998) — fueled skepticism about whether governments were acting in the people’s best interests.

The 2008 global financial crisis marked a turning point. Governments bailed out banks while millions lost their homes and jobs, leaving many with a sense that the system was rigged against ordinary citizens. This sentiment deepened in the 2010s, with the rise of populist movements, fueled by social media and a growing distrust of "elite" institutions. Scandals like the Panama Papers (2016) further exposed corruption among global leaders, reinforcing the belief that the powerful play by different rules.

The COVID-19 pandemic accelerated this trend. Initial waves of solidarity gave way to anger over inconsistent policies, misinformation, and economic fallout. Many questioned whether governments prioritized public health or political interests. In parallel, authoritarian regimes gained influence, presenting alternative models of governance that, while restrictive, appeared more stable to some.

Today, we face a world where trust is fragmented. People increasingly rely on decentralized networks — communities, social media, and private entities — over traditional authorities. Governments now face the challenge of not only rebuilding trust but also redefining their role in an era where transparency, fairness, and accountability are demanded more than ever.

Under Pressure

Trust is the bedrock of ethical decision-making. When trust erodes, individuals and organizations may resort to self-interest, evasion of responsibility, and moral disengagement. The erosion of trust can lead to unethical behavior such as dishonesty, corruption, manipulation, or exploitation. Without trust, people are more likely to view others with suspicion, undermining the sense of collective responsibility and social cohesion.

For instance, in corporate communities, the collapse of trust often results in a focus on short-term profits over long-term sustainability and social good. If a company is caught in a scandal, such as Volkswagen’s emissions cheating scandal, the ethical standards that govern how it treats its customers, employees, and the environment become compromised. The company's manipulation of emission tests for financial gain not only breached environmental regulations but also deceived customers, harming public health and the planet. This scandal significantly damaged Volkswagen's reputation and sparked questions about the ethics of corporate behavior in general.

Without trust, businesses face decreased customer loyalty, diminished employee morale, and a lack of investor confidence. This can lead to a drop in sales, increased turnover, and greater difficulty in attracting top talent. Companies with low trust levels often struggle with brand reputation and may experience backlash from consumers and partners, especially in industries that rely heavily on credibility, such as finance and healthcare.

In governments, trust erosion can lead to disillusionment with democratic processes and undermine citizens’ commitment to societal values like justice, fairness, and equality. When institutions fail to act transparently or are involved in scandals, such as political corruption or election interference, the moral authority of leaders is weakened.

Lack of trust can undermine democratic institutions and create a fertile ground for extremism.

Trust Repair 101

Rebuilding trust is a long-term commitment.

A report from the OECD on trust in government stresses that while trust may be easily eroded, it can only be restored through sustained, long-term efforts in transparency and accountability. This applies equally to governments and corporations. Governments must continue to work towards the public good, ensuring that their actions align with the interests of their citizens. Corporations must remain dedicated to ethical business practices and social responsibility over time.

Public and private organizations that prioritize honesty and consistency in their decision-making processes can restore this perception. The Edelman Trust Barometer of 2025 highlights that 72% of people now say they expect more transparency from their leaders, a direct call for governments to shift towards open, inclusive decision-making.

A report from the World Economic Forum (WEF) on governance and trust highlights a crucial element in rebuilding public confidence.

According to the report, "when governments hold their officials accountable for corruption or misconduct, public trust can recover over time" (World Economic Forum, 2022).

A major example of this is the anti-corruption measures taken by Singapore. The country has built a strong reputation for its low levels of corruption due to its strict enforcement of anti-corruption laws and the transparent workings of its public sector. The result has been a long-standing, high level of trust in government, demonstrating the effectiveness of accountability.

Another example is Iceland, which successfully restored trust in its government after the 2008 financial crisis. The Icelandic government held key figures accountable for their role in the economic meltdown, including the prosecution of bankers and politicians. Additionally, the country's new constitution, which was drafted in response to the crisis, aimed to increase transparency and civic engagement, significantly improving trust in both the financial and political systems.

Restoring trust in corporations is a long-term commitment that requires more than just a one-time apology or quick fixes.

Ethical business practices are not just about compliance with laws; they reflect the company's core values. Restoring trust requires companies to align their actions with their ethical commitments, ensuring that their corporate social responsibility (CSR) efforts are not just PR stunts but authentic parts of the company’s mission.

Restoring trust also involves engaging in an authentic dialogue with stakeholders, particularly those most affected by corporate actions, such as consumers, employees, and communities. Many corporations fail to understand that stakeholder engagement isn’t just about addressing customer complaints—it’s about actively listening to and learning from their concerns, feedback, and needs.

Moreover, regular stakeholder engagement should go beyond crisis management. It should become an integral part of the business culture, where feedback is solicited through surveys, town halls, and open forums.

Trust is restored when companies demonstrate they are accountable for their actions, particularly in times of crisis. This means not only acknowledging mistakes but also taking substantial corrective actions. When an organization admits its faults and works towards solutions, it can demonstrate genuine remorse and the willingness to change. According to psychologist Robert Cialdini, in his book Influence: The Psychology of Persuasion, people tend to trust entities that are consistent, take responsibility for their actions, and follow through with promises.

I. Acknowledge the Breach

Promptly and Publicly: Acknowledge the trust breach or failure. Avoid denial or minimizing the issue, as this can further erode trust.

Take Responsibility: Clearly articulate who or what is responsible. This demonstrates accountability.

II. Investigate and Understand

Thoroughly Investigate: Conduct a comprehensive investigation to determine the root cause of the breach. This shows a commitment to understanding what went wrong.

Be Transparent: Communicate the findings of the investigation to stakeholders. Explain what happened, why it happened, and how it happened.

III. Take Corrective Action

Develop a Plan: Create a detailed plan outlining the steps that will be taken to rectify the situation and prevent future occurrences.

Implement Changes: Implement the changes and improvements. This could include changes to policies, procedures, systems, or personnel.

IV. Communicate and Engage

Communicate the Plan: Clearly communicate the corrective action plan to all stakeholders. Explain the changes that are being made and why.

Engage with Stakeholders: Actively engage with stakeholders to address their concerns and rebuild trust. This could involve town hall meetings, Q&A sessions, or one-on-one conversations.

Be Consistent and Persistent: Consistently communicate updates and progress on the corrective action plan. Regularly engage with stakeholders and be prepared to answer tough questions.

V. Monitor and Evaluate

Track Progress: Establish metrics to track the progress of the trust restoration efforts. Regularly monitor these metrics to ensure that the efforts are having the desired effect.

Evaluate and Adjust: Evaluate the effectiveness of the trust restoration efforts and make adjustments to the plan as needed. This is an ongoing process that requires continuous improvement.

THE TEDCAP APPROACH

In the modern landscape, corporate communities play a crucial role in the social contract that binds governments, businesses, and citizens. Trust between these entities is not only necessary for a healthy and functioning society but also for the long-term sustainability of the corporate world itself. However, trust cannot be one-sided. While governments and institutions must earn trust through transparency, accountability, and action that serves the public good, corporations too must foster trust in their relationships with governments and institutions.

Corporations have a unique opportunity—and responsibility—to model ethical behavior, uphold social responsibility, and demand the same of the institutions with which they engage. This is not about merely being passive recipients of governmental decisions, but about actively participating in the dialogue that shapes those decisions. As the very entities that drive economies, employ people, and influence public policies, businesses must leverage their platforms to encourage accountability within governments, to advocate for fair and transparent policies, and to ensure that regulations are implemented to promote public well-being.

Furthermore, by holding governments and institutions accountable, corporations can also fortify their reputation as responsible, ethical actors. This builds long-term trust not only with consumers and employees but also with the broader community. The role of corporations in fostering this trust is more than just a matter of compliance—it's a commitment to building a framework for social and environmental justice that benefits all stakeholders. By contributing to a healthy, functioning society, corporate communities can ensure their place in a future where accountability and responsibility are not just ideals but integral practices.

The corporate world must recognize that trust is a two-way street.

While governments and institutions must earn their trust through ethical and transparent practices, businesses have the power to actively shape this relationship by demanding accountability, taking responsibility for their actions, and engaging in meaningful partnerships that promote the greater good. This symbiotic trust, built on integrity and shared values, will ultimately lead to more resilient institutions, stronger economies, and a more equitable and sustainable world for all.