The Issue of Trust
The recent articles in InvestorIntel concerning “Trust as the New Currency” got me thinking about my values. Well to be more focussed, my corporate or professional values. Having been part of the Australian resource sector for over 40 years, I got to looking at the professional bodies of which I am part, and to look at the Codes of Ethics. That’s sort of like the fine print in contracts that we all acknowledge but probably don’t spend enough time reading.
I will start with the Code of Ethics of the Australian Institute of Mining and Metallurgy (AusIMM) of which I am a Fellow (FAusIMM). Sections of this article are extracted from a Feature on Professional Ethics by Matt Hadley, Senior Coordinator, Communications, AusIMM, presented in the April 2017 AusIMM Bulletin Magazine.
The purpose of the AusIMM Code of Ethics is “to commit members to uphold and enhance the honesty, honour, integrity and dignity of their professions, such that the members and their professions merit the highest esteem by the community.”
The AusIMM Code of Ethics is deliberately broad so as to encompass all of the different minerals-related professions that make up the AusIMM and the many complex ethical situations that may arise in the day-to-day work of minerals professionals. So what are they?
- The safety, health and welfare of the community shall be the prime responsibility of members of the AusIMM in the conduct of their professional activities.
- Members of the AusIMM shall deal with clients, colleagues and the community in a manner that upholds the principles of anti-discrimination, and of equality.
- Members of the AusIMM shall, on all occasions act in a manner which upholds and enhances the honour, integrity, honesty and dignity of the profession.
- Members of the AusIMM shall perform work only in areas of their competence.
- Members of the AusIMM shall build their professional reputation on merit and performance, and shall not compete unfairly.
- Members of the AusIMM shall at all times apply their professional skill and knowledge in the interests of their employer or client, except that members shall under no circumstances compromise their professional and ethical standards.
- All statements made by a member of the AusIMM in a professional capacity shall be made objectively, truthfully and free of any influence which may compromise their professional judgment, and shall only be made within the member’s area of professional competence.
- Members of the AusIMM shall continue their professional development throughout their careers and shall actively assist and encourage those under their direction to also advance their knowledge and experience.
- Members of the AusIMM shall comply with all laws and government regulations relating to the minerals sector and shall keep up to date with relevant laws in jurisdictions in which they conduct business, and members dealing with public companies shall comply with the rules, regulations and practices governing such companies as are published by the relevant stock exchange from time to time.
Seems like all bases are covered if the Code is diligently practiced, but just like the Ten Commandments have been expanded a gazillion times to remove the grey areas or to enhance compliance, we still have issues in the resources sector. We have tailings dam failures. We have protest groups against our developments. We seem to be an ongoing target. But we are the solution! We have to earn trust again. But why is it so topical at this point in time?
In the Insight Feature of the April 2017, Company Director magazine presented by the Australian Institute of Company Directors (AICD), (of which I am a member, MAICD), there is an article titled “Trust in crisis – A global trend” prepared by the AICD Governance Leadership Centre. The article reports on the findings of the 2017 Edelman Trust Barometer. The survey reveals the largest-ever drop in trust across the institutions, business, media and non-government organisations (NGOs) in the 17 years of the survey.
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Directors grappling with the implications of a rising tide of populist sentiment will not be surprised by the findings, which the researchers describe as a “global implosion of trust.”
More than half of the respondents to the global survey – run across 28 countries, with more than 30,000 respondents, dividing the survey between “informed public” and “mass population” – believe that the current system has failed them and is unfair.
The survey also found that the credibility of leaders was at its lowest level – CEO credibility fell to an all-time low of 37 per cent globally, sitting even lower in Australia at 26 per cent.
Here are the 10 key insights from the 2017 Edelman survey:
- Trust in crisis: Trust in the institutions of media, business and NGOs has dropped. In 20 of the 28 countries surveyed – including Australia – more than half of the mass population respondents distrust their institutions.
- Trust inequality: The gap in trust between the “informed public” and “mass population” groups is at its highest level in the survey’s 17-year history, at 15 points.
- A broken system: More than half of respondents globally believe the system is not working for them (50 per cent for Australia).
- Concerns and fears: Driving the embrace of populism are fears about corruption, eroding social values, globalisation, immigration and concern over the pace of change.
- Failing system + fear = action: Ten of the 28 countries surveyed – including Australia – combine an above average lack of belief that the system is working with multiple societal fears. In Australia, as in other places, this is leading a resurgence in populist political parties.
- The media echo chamber: People are almost four times as likely to ignore information that supports a position they don’t agree with, and are more likely to believe information from search engines over human editors. In Australia, the decline in trust in the media has been significant, dropping by 14 points to 40 per cent, and for the mass population group Australia’s trust in media at 32 per cent is among the world’s lowest.
- Peers highly credible: For the first time, a “person like yourself” is seen as at least as credible as an academic or technical expert.
- Business adds to fears: Globally, more than half of respondents feel the pace of change in business and industry is too fast. Concerns include automation, immigration, lack of training and skills, and offshoring. This is feeding support for anti-business policies – almost one in two respondents oppose free trade agreements and 72 per cent support protectionist trade policies, even if it slows economic growth.
- High expectations of business: The three most important attributes for building trust in companies are treating their employees well, offering high quality products, and listening to customers. Employees are viewed as the most credible spokespeople for business, as trust in the c-suite and boardroom continues to decline.
- With the people: Edelman argues that the trust crisis demands a new operating model of listening to stakeholders and tapping into peers and employees to lead communication and advocacy.
Seventy-five per cent of global respondents agree that companies can both increase profits and improve economic and social conditions. The survey outlines five actions that business must avoid to further damage trust:
- Paying bribes.
- Paying executives hundreds of times more than workers.
- Moving profits to other countries to avoid tax.
- Overcharging for essentials products and services.
- Lowering costs by reducing quality of products.
In discussing the Australian results, Edelman notes that: “Business now has a clear opportunity to rebuild trust by recognising the need to do things differently. We need a holistic approach that puts people at the centre of engagement, not just as one more audience to be reached.”
So what does this “Trust in Crisis” mean to us as editors for InvestorIntel and for you as our audience? I believe where there is a crisis there is opportunity. And that opportunity is for us to listen to you and respond accordingly. Do you trust us? Let us know! You will have already been aware of our greatly expanded social media reach. This is our attempt at providing the coverage and the interaction process that is best suited to the new world – your world. Let us know how we are going.
This is where I plug my “In Search of Excellence” articles, that will roll out over the next 6 months or so as a trial. I am looking for those opportunities that I see as excellence. I would expect you to see them as perhaps as the building blocks (the currency) of trust. So that when enough building blocks are put together, trust returns, and looking at the resources sector our social licence to operate returns. You trust what we do and what we say. You listen to us and we listen to you. The articles of InvestorIntel and your involvement can provide that opportunity.
Mr Mackowski is a qualified engineer in mineral processing with over 30 years technical and operational experience in rare earths, uranium, industrial minerals, nickel, kaolin ... <Read more about Steve Mackowski>