Show Hide image Politics 5 March 2014 A lack of trust: addressing the "trust deficit" facing UK businesses Trust in banks and businesses has was severely hampered by the financial crisis - and has yet to recover. The mistrust cuts both ways. How can we expect a recovery without support for business from politicians and the public? Print HTML The financial crisis that seized the developed world in 2008, sending shock waves through markets and plunging the world into a prolonged recession, did more than wreak socio-economic havoc: it significantly eroded trust between politics, business and the media. By inference, the public’s trust of politics, business and the media has been negatively impacted and a series of scandals involving each of these key pillars of society has enforced this sense of mistrust and created schisms between these institutions, driving a rift between them and the public. The importance of trust cannot be underestimated: it is an essential component of a flourishing democracy and economy. Without trust, investment is severely hampered and growth is strangled before even the "green shoots" appear. The dearth of trust is one of the major issues facing society today. A recent research report conducted by Populus, commissioned by DLA Piper, has found that multiple trust "deficits" exist in our society. Moreover, the lack of trust between the three aforementioned "estates" is not only deeper now than back in 2011, when the inaugural Trust report was published, but it is wider too, with diverging ideologies splitting political parties, the phone hacking scandal afflicting the fourth estate, and the manifold recent negative stories stemming from the business community, particular from the financial services and energy sectors, appear to have tainted the reputation of all private enterprise. It is clear that trust between business, politics and the media has now broken down completely. "Trust in business" remains at the forefront of the political agenda. Westminster remains committed to addressing what is perceived to be widespread malpractice among businesses - from energy firms hiking prices to PPI mis-selling – all to the detriment of the consumer. There is a view that non-financial services businesses are increasingly resenting being tarnished by the same brush the media and politicians have used to smear the reputation of banks over the past few years. Businesses have not necessarily addressed this negative perception in a particularly proactive manner. While there is acknowledgement that the financial crisis has been a torrid time for businesses, there is little sign that corporate behaviour is changing in any meaningful way. In other words, it’s business as usual for most businesses, who do not see themselves as the source of the "trust deficit" problem. With one influential media commentator opining that there should be a "bankers wing" at Ford Open Prison, the lack of awareness shown by some businesses is pretty surprising. While public outrage, manifested through politicians, media and populist movements, being directed at certain business malpractices is understandable, it has led to an unhealthy overarching anti-business mood, which is hampering a sustainable recovery in the UK. This lack of trust cuts both ways. If businesses are viewed by the majority of politicians with deep scepticism then the feeling is mutual, with a growing sense in the business community that politicians and the media simply do not understand capitalism. This is particularly the case with politicians, who can be viewed as being devoid of business experience and accused of drawing ill-informed and uphelpful conclusions, which has hampered UK growth and the international reputation of UK plc. As a corollary to this, political messages are seen by business and the media as being opaque and often contradictory. What can businesses do to address this trust deficit? A good start would be to make more noise about the myriad ways in which British businesses should speak out more and deliver positive messages which show that they are a force for good. It is clear that businesses expect industry organisations such as the IoD and the CBI to do more in this regard, but businesses themselves should also be promoting the virtue of capitalism and the benefits it brings. Schools have a role to play in explaining the value of commercial activity and countering any cultural problem with success. Business needs to re-evaluate its social responsibility and pro bono activity accordingly. Only through a concerted effort involving all stakeholders can this critical issue be addressed and, through exploring the areas where trust has broken down, solutions for the long term formulated. › Chuka Umunna's speech on Agenda 2030: Earning and growing our way to a higher standard of living Co-CEO of DLA Piper Subscribe More Related articles Chinese loan sharks are using nudes as collateral. Is this the grim future of revenge porn? Tea Leavers and Champagne for Remain: what your shopping basket says about your EU stance “I’m a big boy”: What happened when MPs grilled Philip Green about the BHS scandal?