Loss of human connectivity has created challenges for CEOs. Globalisation and technology continue to remain challenges but mastering them is necessary to maintain the human engagement necessary for trust.
Trust is not just an internal engagement issue or a political one.
External stakeholders are taking more notice of what businesses are doing in the broader community and losing trust can be a serious business risk, especially as investors take a greater interest in the finer operational details.
CEOs need to understand the causes of low trust and implement strategies to not only build and sustain current trust levels but also rebuild trust.
What to do?
Corporate communicators now have a wide range of both qualitative and quantitative methods to assess all elements of key external stakeholder relationships.
Perhaps not surprisingly, trust was a core element in the relationship between a CEO, media and the investment community.
The media see trust as an important factor when communicating with CEOs and company analysts value trustworthiness, as well as honesty and transparency, as top competencies for effective communications. This also drives perception of effective leaders.
With CEOs having to cope with increasingly intense scrutiny and competition, and new demands of customers and investors, being a highly competent and trusted communicator remains a core skill.
CEOs need to know the reasons for their relationships with key stakeholders inside out.
They also need to be highly knowledgeable of the perceptions of those stakeholders so that, when they construct messages, the chances of meaningful communication are greatly enhanced.
Trust is the critical variable CEOs must generate to be able to communicate effectively.
The key question then is how can CEOs improve their trustworthiness?
Trust can’t be negotiated - but it is a form of exchange. Visibility and participation in public forums is a good way to build trust.
CEOs need to be storytellers – their staff need to know not just what is expected of them but why; media, investors and analysts no longer take what a CEO says at face value, the narrative behind what they say needs to be coherent and they must be able to engage in debate around it.
CEOs also need to communicate with their most intimate core audience who can then be ‘influencers’ to spread the word internally, and then to key external stakeholders, especially investors, analysts and the media.
In my view this makes the role of the senior corporate communication staff increasingly important.
They must help their CEO invest more time and commitment to communicating, stay involved in the trust relationship they have with stakeholders and increase awareness that their communication effectiveness is contributing to the trust in their customer.
Trust is essential but it must be earned. And to earn it communication must be two-way - a dialogue.
Dr Donald Alexander is Senior Lecturer, Public Relations and Organisational Communication, School of Communication and Creative Industries, Bathurst Campus at Charles Sturt University. For the last six years he has been running a research project on core CEO attributes sought by investors, analysts and the business media.