How do the youth of today define trust in business and what significance does it bear on our lives and our futures? Victoria Bejarano, Mafhungo Nevhutalu and Sandra Omanhene are three young women who were born and raised on three different continents who have sought to find answers to this seemingly complex but important question.
Trust cannot be defined in only one way, and can often be described as ambiguous, particularly when examined by individuals from diverse geographical, religious and socio-economic backgrounds. As youth from various parts of the world, this was a complex task, but a unanimous consensus developed on what trust should reflect: integrity, or “doing the right thing, even when nobody’s looking.” (Marshall C, 2003)
So why is it so important? Trust at both the interpersonal and institutional level is a key ingredient of growth, social well-being, and governance (OECD, 2017). Widespread trust is crucial both for “facilitating coordination and cooperation for mutual benefit” (Putman & Lund, 2005) and for building social solidarity in a society. As outlined by Francis Fukuyama, societies with a high level of trust have been associated with better economic performance (Francis Fukuyama, 1995).
While as a society, we are aware of the role that trust plays in our economy and life, recent trends do not paint a positive picture. Results from the World Value Survey have demonstrated that levels of interpersonal trust between citizens and federal governments are historically low, and there is a perceivable decline of trust of citizens in OECD countries in recent years. While this may appear as a problem concerned with government, it extends to the private sector as well. A lack of trust in business continues to be highlighted by the increasing calls for ethical and sustainable business, and a growing unwillingness of the public to accept companies that may not abide by these standards.
It is deeply concerning to the youth that trust in public and private institutions is declining. Generating trust is a key factor for establishing development conditions, including efficient allocation of capital, innovation, productivity and even relationships and human capital (Francis Fukuyama, 1995). Furthermore, it should be noted that interpersonal and institutional trust is also essential for the functioning of democracy (Weinert, 2018). It promotes a greater level of collaboration among citizens and inspires them to unify, ask more from their leaders, holds them accountable to fair rules of democratic governance and encourages innovation to evolve the system.
As students of international economics and business, we have sought to find strategies that can bridge the trust gap. In this article, we suggest that individual trust, in both government and business, is crucial when attempting to establish a common responsibility that can promote socio-economic development, especially in developing societies.
So, what would a world look like where governments and the private sector are trusted by ordinary citizens, and how do we get there?
Firstly, we envision a society in which all citizens are treated fairly and in which inequality has no bearing, where citizens have full trust in their respective “government(s) to do what is right and perceived fair” (Easton, 1965). Secondly, a society where citizens believe in the organisations, which are meant to provide basic services to populations. For example, a world where SOEs provide comprehensive services and where corruption is no longer a concern for residents would be a key pillar of such reform. The state of healthcare infrastructure and the social system is an important example highlighted during the current global Coronavirus pandemic. While the performance of many administrations was tested, countries that had particularly vulnerable public infrastructure and health care systems took excessive strain and it led to a preventable loss of many lives. Thirdly, businesses would operate in a fair and transparent manner and conduct business with a sustainable outlook, conscientious of the environment and societies in which they operate.
We are a generation of the future whose survival depends on the actions of our leaders of today. So, what then can both governments and organisations do to safeguard our futures? While seemingly idealistic, we believe that both governments and businesses alike can make this a reality through the following set of considerations.
The role of good governance is critical. The trust that youth have in their governments is crucial to the continued development of our countries. The following strategies are seemingly obvious, but governments could go a long way in improving the trust their youth have in them, by prioritising these tenets:
- Ensure transparent and fair democratic processes.
- Institute policies that prioritise the provision of social programs.
- Ensure the delivery of public services while maintaining transparency and accountability.
While Nordic countries and countries such as New Zealand and Singapore have long been known for their low levels of corruption, many countries across the globe are making strides in this respect. Uruguay is an example of a country that has not only managed to reduce corruption after the end of their dictatorship in 1985 but has maintained low levels of it. Regarded as one of the cleanest and least corrupt countries in not only South America but globally, the country regularly ranks high on Transparency International’s Corruption Perceptions Index (Transparency International, 2016). Part of its success has been in maintaining democratic electoral processes and the erasure of clientelism in government and the management of state resources. The country has also invested heavily in social programs that have helped in dramatically reducing poverty. Though not perfect, it serves as an example of the efforts that countries can make to ensure that the interests of their citizens are prioritised. These efforts and objectives to improve the lives of the average citizen are what young people all over the world hope to see their own governments achieving.
For us, the support of entrepreneurship and investment from governments is a key factor to improving trust as well as stimulating economic growth.
For this to be effective, alongside governmental efforts, and the private sector will have to be certain that fair, competitive and transparent measures are implemented to ensure that citizens have trust in them. Their role in society has never been more critical and moving from a ‘profit to purpose’ based model will engage the best talent. A ‘purpose’ led business model should include:
- Adhering to national and international regulatory standards.
- Conducting business with a sustainable outlook, including a reduction of the impact of business activities on the environment and society. This should also include remedial efforts for any harm already inflicted on communities or the environments in which they operate.
- Ethical behaviour in all spheres of business and increased transparency and accountability.
Finally, governments need to have more engagement with members of the youth and civil society organisations in order to identify inefficiencies and areas of concern as well as to devise effective strategies that would solve even the most particular of citizens’ concerns. International organisations, such as the OECD which aims to unite governmental organisations, businesses and civil society in efforts to increase trust, play an important convening role here. These would ensure that organisations and governments would be held even more accountable, not only by members of the public, but by peer institutions as well.
It will become progressively difficult for organisations and governments to thrive in a world that is increasingly interconnected, in which transparency is no longer optional and in which its citizens and leaders of tomorrow refuse to keep silent when promises are not kept. The time to begin with efforts to ensure a safer, happier, more equitable future for all its citizens, particularly future generations, has never been greater than right now.
Victoria Bejarano is a Master’s in International Economics & Sustainable Sustainable candidate in France, from Colombia. She has around four years of experience in multicultural organizations, and she believes in the matter of becoming a female leader to face challenges in the complex and international environments to create social and economic value around her. She enjoys collaborating with people from different backgrounds, aiming them to succeed in projects, and she is strongly committed to pursuing excellence. She trusts that different sectors such as the private sector, public authorities, and non-government organizations through international cooperation can work together to create sustainable development.
Mafhungo Nevhutalu is an International MBA candidate in France, originally from South Africa. She has a passion for policy development and business – and the intersection of the two to tackle some of society’s greatest inequalities. This was further developed during her work experience in the public and private sectors of South Africa as well as with different development and charitable organisations on her home continent. Mafhungo holds a Bachelor of Science degree in Mathematics and Statistics, a Bachelor of Commerce Honours degree in Financial Analysis and Portfolio Management and a Master’s degree in International Economics. She hopes to become a leader of industry who enacts real change not only in her home continent but as far as her reach is possible.
Sandra Omanhene – Originally from Ghana, Sandra is an International Economics & Sustainable Development Master’s candidate. Interested in international cooperation and project management, she has worked in the public sector in Ghana, with the Ministry of Agriculture and for private companies in France. She is currently implicated in projects tackling issues such as gender inequality and digital access for female entrepreneurs in Ghana. Sandra holds a bachelor’s in International Economics and Management, and has a keen interest in contributing to business and policy development in an international setting.
Easton, D. 1965. A Systems Analysis of Political Life, John Wiley, New York.
Francis Fukuyama, H. 1995. Francis Fukuyama, Trust, the social virtues and the creation of prosperity. Revue française de science politique, 45(6), 1050-1052. Cairn.info.
Marshall C. 2003. Shattering the Glass Slipper. 1st edn. Prominent Publishing.
OECD. 2017. OECD Guidelines on Measuring Trust
Ortiz-Ospina E, Roser M. 2016. Trust. OurWorldInData.org
Putman, R., & Lund, J. 2005. The business of apocalypse: Robert Putnam and diversity. Race & Class, 46(4), 53-67
Transparency International. 2016. Uruguay: Overview of Corruption and Anti-Corruption
Weinert, F. 2018. The Role of Trust in Political Systems. A Philosophical Perspective. Open Political Science. 1. 7-15. 10.1515/openps-2017-0002