When EY teams asked alumni about the critical ways that corporates can build trust, two-thirds (66%) said that ‘being transparent about the financial information they report externally’ will be critical.
Recent global research from the EY FAAS team – How can the digital transformation of reporting build the bridge between trust and long-term value? – shows how organizations can transform reporting transparency by exploiting the huge volumes of data at their disposal and rethinking their approach to intelligent technologies. These range from artificial intelligence to blockchain.
2. Creating trust in data to drive innovation while managing risk
The public are increasingly concerned about how organizations use, monetize and share their personal data. At the same time, however, organizations are focused on turning enterprise data into insight. This means negotiating a difficult balancing act: driving innovation in how they use data without compromising standards and undermining trust.
The research found that ‘protecting consumer data’ is critical to building trust and meeting consumer needs. Close to all of alumni – 97% – said that this was important if a company wants to successfully meet the future needs, values and behaviors of consumers. This is an issue that matters to all generations.
Consumers of all ages want their data protected94%
For alumni aged 25 or younger, the vast majority say that protecting consumer data is important to keeping future consumers on-side. For those 50 or older, 97% said it was a critical issue.
It was also found that “building consumer confidence that online channels are secure” emerged as the number one priority for building a successful digital customer experience.
To build trust in how they manage data, organizations will need a clear code of ethical conduct around data. They also need to see regulatory obligations not as a compliance exercise, but a means to take a positive attitude. Companies that are trusted in how they manage data will generate significant value, and organizations should proactively incorporate data and trust into their corporate reporting.
3. Instilling a strong sense of purpose
The rules of business are changing. For example, as new generations such as Millennials enter the workforce, new attitudes prevail. This generation sees a world in flux from new technologies, such as artificial intelligence. As a result, they see employment flexibility as not only desirable, but something that is key to their skills remaining relevant in a disrupted world. To secure their long-term loyalty and trust, companies will need to offer more than just money and the pursuit of profit.
As a result, companies are reinventing themselves, looking to connect with their full range of stakeholders in new ways, including employees, suppliers, the environment as well as the local and wider community. Engaging with these stakeholders, and winning their trust, means defining and establishing a sense of purpose beyond the balance sheet: one that contributes a positive impact in the wider world.
The research shows that there is clear consensus among alumni about what constitutes having “purpose.” Close to two-thirds (63%) see having purpose as “creating value for a broad set of stakeholders, including society and the environment.” This broader definition embodies what EY professionals call capital P “Purpose,” differentiating it from narrower definitions.
How would you describe “purpose?”63%
The majority say it is about creating value for a broad set of stakeholders, including society and the environment. Only 7% see it as being about maximizing shareholder value.
Of course, being a purposeful organization is about more than just adopting the rhetoric. Actually living and effectively demonstrating a commitment to that purpose is a much larger task. Purposeful companies align their strategy and decision-making with a purpose that responds to the needs of their stakeholders and is grounded in the heart of what they do. They constantly evaluate where they are in their journey and what needs to change, taking concrete steps to make that happen. If words are not matched by deeds, organizations will lose trust rather than securing it.
Businesses should not become complacent because they enjoy a relative trust advantage. As fast-advancing automation and artificial intelligence threaten jobs, people’s trust in companies could be threatened as their fears about their employment prospects mount. To manage this risk, companies need to actively engage externally, keeping all your critical stakeholders up-t0-date on your stance on key issues, from data ethics to purpose. This will be critical to cementing trust and protecting long-term value.
Companies can manage risk and build trust by communicating their stance on data ethics and purpose.