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CONTENT The world's fastest growing and most dynamic economic region is broadly a trusting one, but the profile of trust varies hugely from country to country and sector to sector. In this series of essays based on the world's largest and most established study of trust, business leaders and communicators can gain valuable insights into building and protecting trust in nine markets and four sectors across the region.































FOREWORD Edelman has been studying Trust for 13 years now globally and in the Asia Pacific region for 9 years. Trust is the foundation of corporate and brand reputation and in every culture and language there is a word or a phrase that conveys a remarkably consistent meaning.

In this brochure we are for the first time bringing together commentary from Edelman leaders around the region on Trust in their markets and sectors. For anyone wanting to plan corporate or brand reputation in the fastest growing and most dynamic of regions, we hope this is a valuable guide. In Trust as in many things, there is no such country as Asia Pacific and if this study does anything it should illustrate that Trust building approaches need to be very country specific.

Trust in English means 'the firm belief in the reliability, truth, ability, or strength of someone or something'. In business, without trust very little can be achieved and it could be argued that the more trust that exists in a market or society, the more efficient it becomes.

For example, among informed publics in Korea, only 31% of respondents believe that business can be trusted to 'do what is right'. In India that number is 81%. In Japan only 32% Trust their government to do what is right after the cover ups and fiascos surrounding the earthquake, tsunami and nuclear disaster. In contrast, the consistently smooth running of Singapore garners that island's PAP government with an 82% trust rating, also among informed publics.

But if trust is a universally understood value, the way in which it is earned, conferred and enjoyed is very specific to each country. In Asia Pacific, we are broadly a trusting region. Six of the top nine most 'trusting' nations are from the Asia Pacific. But then Australia, Japan and South Korea are in the bottom nine and Japan is only more trusting than Russia.














China UAE Singapore India Indonesia Mexico Netherlands Hong Kong Canada Malaysia Italy Argentina Australia Brazil Sweden U.S. South Korea Poland U.K. Ireland France Germany Spain Japan Russia

76 68 67 65 63 63 61 61 58 57 56 54 53 51 49 49 44 44 41 41 40 39 37 34 32



















South Korea




















Russia Ireland

40 39



China Singapore India Mexico Hong Kong UAE Malaysia Canada Indonesia U.S. Netherlands Brazil Germany France Sweden UK Italy Australia Poland S. Korea Ireland Argentina Spain Turkey Japan Russia

80 76 71 68 67 66 64 62 62 59 59 55 55 54 54 53 51 50 48 47 46 45 42 42 41 36

Composite score is an average of a country’s trust in all four institutions. Informed Publics ages 25‐64 in 20‐country global total 

Big Changes  from 2008  Germany   +19 China         +18 Canada      +14 India           +11

Big Changes  from 2012  Germany    +16 France         +14 UK                +12 US                +10

The study also highlights that many companies headquartered in our region are trading at a huge Trust discount abroad; something which affects the brands they try to market and their ability to do deals and win cooperation in the developed world. Companies from our two biggest economies China and India are trusted by only 35% and 34% of informed publics globally. Compare that to Canadian or German companies who score 76% and 75%. This trust deficit means AP firms are losing deals, paying more for deals and being blocked by governments and unions who do not know what they stand for and what their values are. Proactive engagement programmes by companies going abroad and by national trade development agencies are vital if businesses from our region are to succeed in growing abroad. (Continues on next page).




Global trust in companies headquartered in Germany, Sweden, Canada and China has remained stable since 2008*

82% 69%

78% 72%





58% 50% 36% 29% 19%

Germany HQs


Sweden HQs

Canada HQs

China HQs

India HQs

Brazil HQs

Q26-Q42. [TRACKING] Now we would like to focus on global companies headquartered in specific countries. Please indicate how much you trust global companies headquartered in the following countries to do what is right. Use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box – Trust) in Developed (includes US, UK, Germany, Japan, France) vs. Emerging Markets (includes Mexico, China, Brazil, Russia, India)

*2008 data used includes Informed Publics ages 35-64 only in 18-country global total


I hope that this taste of some of the differences that exist in the trust profiles of countries in the region encourages you to read the essays in this booklet. If you are interested in a more detailed presentation on a market or sector than please connect with the appropriate Edelman leader.

And for those planning media relations programmes in our region, it might be useful to know that while media is highly trusted in China, India, Singapore and Hong Kong it is much less trusted in Australia, Japan and South Korea. The study also reveals which spokespeople are most trusted to tell how it is, and the big news for some is that is not always the CEO and more often an employee or academic. Trust varies by industry sector with Technology in Asia Pacific and globally being the most trusted for many years now. Banking has suffered a cataclysmic decline in trust in the west on the back of the financial crisis and the various scandals over the last few years, but in our region banking remains highly trusted with not one market putting their trust below 50% and in many rating it very much higher.



2008 50% of markets surveyed have a trust score 50% or above

81% 79% 80% 79% 77% 70%


2013 62% of markets surveyed have a trust score 50% or above

70% 68% 66% 65% 65% 66% 65% 61% 61%


61% 60% 61%




61% 59% 57%

47% 42%



57% 51%






45% 37%


49% 47% 47%


48% 45%


45% 43% 43% 42% 38% 36% 33% 26%




Q11-14. [Media in General TRACKING] Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) Informed Publics ages 25-64 in 20 country global total (excludes Argentina, Hong Kong, Malaysia, Singapore, Turkey and UAE) and across 26 countries

David Brain President & CEO, Asia Pacific 7

BUILDING TRUST ACROSS INSTITUTIONS THE RESPONSIBILITY OF THE CEO Trust is a key currency in ensuring the confidence across our Asia Pacific markets, where understanding the way business operates can still be limited by foreign companies and management. There is a clear correlation between economic opportunity and the level of Trust and it is a key driver to ensure that overseas investors have the confidence to positively look at our markets. The 2013 Edelman Trust Barometer however shows again that over the last 12 months, there have only been small gains in trust. Globally, and across APAC, the Trust in government, business, NGO's and media has just muddled forwards. In fact although there were small incremental gains, Trust has very shallow roots and as it's so fragile, an institution can face rapid and devastating impacts, when exposed to criticism or faces a crisis. Trust in the solvency and security of a country or a company is closely linked to Trust in the competence, wisdom and integrity of its leaders and their ability to meet their commitments. This is a basic principle for building credibility, Trust and a good Reputation. And it has more to do with what we do than with what we say. There remains a large gap between Trust in the institution and its leadership. While Trust in institutions across APAC is middling, there is a notable lack of Trust in leaders to 'do what it right' and particularly, to tell the truth. In fact there is a real crisis in leadership across most APAC countries. Also the main drivers of business distrust relate to transparency, ability to manage fraud and corruption, all elements of Trust under the direct control of the CEO. The BOD and CEO are the top two identifiers as those responsible for fixing problems, there is also a significant belief that policy influencers also


can contribute to improving business and country issues by improving controls and regulations. It is also interesting to note that although financial performance of a company remains important, and is consistent across all businesses, what comes through very clearly is that there are other factors which will differentiate a company ahead of its competition. These include broad categories of: great levels and better engagement with employees and customers; innovative and high quality products and services; and integrity such as full disclosure and openness, better transparency, taking responsibility during a crisis; with operational matters, including financial outcomes, as the last key differentiator among external stakeholders. Within business, the opportunity exists for leaders to fully embrace its employees as advisors; its employees as advocates; its employees as agents for change. Often these groups are only seen as providing the commercial outputs. However the CEO remains important in providing the vision and leadership, but internal stakeholders have increasing influence throughout the external environment and more and more Trust is being given to these groups. There is no doubt companies must be vigilant to earn, nurture and protect a positive Reputation among stakeholders. But Reputation is more about the rearview mirror; it is the result of an institution's past behavior. Trust, however, is a license to operate and permission for the business to act, do, manufacture, and offer services, etc. in the future. Trust allows institutions to bring stakeholders along as active participants and advocates because of the depth and confidence inherent in their relationship. There is danger in building Reputation alone, most often seen in companies renowned for financial or

operational excellence, but this doesn't inherently inoculate from risk or fuel forward momentum. When Reputation is not matched with Trust, growth barriers can arise. This is when we see institutions lose public support for acquisitions, struggle for forgiveness after missteps, lose share to more trusted technology, wrestle real estate deals through NIMBY campaigns, or undergo acrimonious union actions. An authentic balance of Reputation and Trust is built upon both operational and societal demands.

responsibility for the CEO to respect peer to peer communications, to communicate and cascade messages to employees as well as external stakeholders, the latter of whom have traditionally not been a priority of the CEO. The CEO must adopt 'inclusive management' and enlist management and employee's support.

In Trust building, stakeholders have expectations, and then develop positive perceptions of how the institution performed against those expectations, which lead to their future Trust and expectations. First, an institution must know what their stakeholder expects of them, and know how they're performing against those expectations‌ then there is a need to close the gap between expectations and performance. Engagement and communication is critical to raise awareness about performance. We know transparency, about positive and negative aspects, is a huge faith-builder. Inherent in this Trust dynamic is some level of engagement, or relationship between the institution and stakeholders. The closer the engagement, and the more explicit an institution's promises are, the more Trust can be earned (or lost). When institutions' commit to transparency, open engagement with stakeholders, and then achieve stated objectives, they are building Trust. It is the CEO's responsibility to close the gap in trust between the Institution and its multiple stakeholders. There is still a very real role for the CEO to share vision and direction of the company in which they lead, but today there is a growing

Chadd McLisky Chairman,APAC Corporate Practice 9

AUSTRALIA: A LEADERSHIP VACUUM USHERS A NEW ERA OF ENGAGEMENT Throughout 2012, Australian headlines screamed of an economy grinding ever so slowly but surely to a halt. The great mining boom over, increases in costs of living and a year that saw new lows in the political debate left much of Australia feeling ambivalent, uninterested and a little underwhelmed by the political and economic landscape before them. The end result? In 2013, marketing to the Australian consumer is harder than ever before. In 2013, while trust globally in all institutions regained a little of the lost ground post global financial crisis, trust in Australia dipped across the board. And while a slide in trust in government by a further 4 percentage points is no surprise, it was the overall slide of 9 percentage points in trust in business that is most telling.

largest polluters to drive a reduction in national carbon emissions and force businesses and consumers alike to improve energy efficiency. The controversial policy decision, now widely accepted, had been discounted prior to the Government's election to office but later recanted during negotiations to form a minority government.

Why? Because more Australians are saying they do not trust government or business leaders to tell the truth and the gap between expectations and perceived performance is growing. In 2012 the Edelman Trust Barometer pointed to business's "License to Lead". While individual executives and companies in Australia may have continued to lead in their respective sectors, for the most part, Australia's business community sat the year out, waiting to see what would happen in Canberra.

"Broken promises" remained the theme in political debate nationally, with the trust data suggesting that the decrease in trust in government was attributed to poor overall performance and perceived incompetence.

The year started with Prime Minister Julia Gillard continuing to fight leadership speculation regarding former Prime Minister Kevin Rudd, culminating in a dramatic caucus ballot that saw her defeat Mr. Rudd 71 to 31. A state government was thrown out in a landslide victory and controversial decisions regarding immigration policy caused widespread debate across traditional and social media. Put mildly, the year started contentiously and continued from there. This year also saw the federal government introduce a price on carbon, taxing Australia's


A war-of-words between the federal government and key business groups played out in nightly news broadcasts, and in daily newspapers – the very place Australians had traditionally placed a high level of trust. On the back of this Australian mining magnate Gina Rinehart teamed up with other key business leaders to increase their shares in Fairfax media, one of Australia's largest diversified media companies. Its independence is staunchly protected by its readers and staff alike and the move led to widespread debate. Both News Ltd and Fairfax media also made decisive moves this year in response to the impact of digital media on the traditional broadsheet and tabloid forms of news. Significant restructures and job cuts across all mastheads of these companies cut deeply and many questioned the ability for

media to provide quality, objective news reporting with a shrinking resource base and increased deadline pressure. So it's not surprising that this year saw trust in media as an industry hold steady. But the news is no better for business. Forty-six per cent of the general population in Australia said they do not trust business leaders to tell the truth, a decrease of six percentage points from the previous study. For the most part, this decrease was attributed to business making decision based on the wrong incentives. It's important though to look at the context of this sentiment more broadly. According to the Roy Morgan consumer confidence rating, Australia hovered around the 110-115 point mark throughout the year, lower than the previous two years but higher than the scare of 2008. The high Australian dollar continued to bite hard and affect consumer and business confidence, driving interest rates down and creating a general sense that the economy would be in for a tough year ahead. This is reflected in the unusually low confidence in the banking sector among informed publics (only 40 per cent compared with an Asia Pacific average of 72 per cent), despite Australia having one of the most secure banking systems in the world. So what does this mean for leadership as we enter into an election year that will undoubtedly be dominated by debates about trust, confidence, and performance? Globally, there is a real sense that leadership is in crisis. In Australia, there is no crisis. Despite the

tumultuous year-that-was, Australia remains a trust neutral market‌ just. What we have here is a leadership vacuum that engagement, integrity and purpose once filled. Reengaging an otherwise ambivalent public has to start with genuine open dialogue. From CEOs and political leaders, academia and the technology sector, through to employees and the general public alike. There is a new dynamic emerging where conversations are informed by an ever increasing array of sources, where it's no longer ok to rely on a single spokesperson and a single message to engage with people. The opportunity for business is to stimulate the apathetic Australian public, to excite not just through product innovation, but through the experience of brand engagement. This is the year that Australian business leaders can put themselves back on the map with international business figures such as Branson, Green and Cook. Such an opportunity is just as valid for the public sector in a year where Australia's major parties will resume the fight in the pits of Parliament. So when election ballots open later in 2013, it will be the party most able to engender a renewed sense of trust which will likely triumph on the day. And regardless of the victor's colours, unequivocal triumph will return stability to the marketplace.

Michelle Hutton CEO, Australia 11

TRUST IN ASIA PACIFIC: BRIDGING THE GAP BETWEEN BUSINESS AND GOVERNMENT According to Edelman's 2013 Trust Barometer, trust in government and business is slowly on the rise. But at the same, we are becoming increasingly disappointed in the people running these institutions. In Asia Pacific, this "Crisis in Leadership" presents a clear opportunity for businesses to earn their license to lead and rebuild trust through closer, strategic and transparent engagement with the public and with the government. This year's annual Trust Barometer paints a good – but not great – picture for governments around the world: globally, government trust levels have risen from 43% in 2012 to 48%. Good, because it shows we are slowly regaining our trust in government, but not great because the average level of trust has yet to hit above 50% since 2011. As with many other things, the story in Asia Pacific is somewhat different. Trust in government has improved in APAC as well, with levels improving by 6 percentage points from 2012 to reach a score of 60% Yet it's only when you take a closer look at these results do you understand the significance of them: out of the nine APAC markets surveyed, three reported increased levels of trust in government, while the other six markets remained flat. Most importantly, trust in government exceeds 50% in the majority of these markets, and either exceeds or is on par with trust in business in five of the markets surveyed (China, Hong Kong, Singapore, South Korea, Malaysia, and Australia). In APAC, where the line between business and government is slightly more blurred, these results reiterate the increasingly important role of government in both business and society. In a


market like China for example, the government is involved in almost every aspect of business – without good government relations, it's unlikely a business will ever have sustainable success. As vital as these government institutions are to long-term business success, they are also faced with their own unique challenges: government policy and infrastructure can hardly keep pace with the unprecedented changes and pressures that accompany such rapid economic growth. Environmental, political, societal, ecological and economic issues are intersecting at an unprecedented rate, and APAC governments are increasingly relying on businesses to help address these issues. For a business to succeed, it must work closely with government in a constructive, transparent and strategic manner. Business objectives should support government objectives and contribute to the overall well-being of society. But businesses themselves have some work to do before they can enter into a market and lead. When asked about why they distrust government, the majority of respondents in five out of nine markets cited corruption and fraud as a top reason. Although only three out of nine markets cited

corruption and fraud as a top reason for distrust in business, business leaders should take this to heart as a reflection of the attitude of the general public. What's clear is that citizens are demanding more from their leaders – whether they are in business or government. If an institution is not capable of meeting these demands and operating from a position of transparency, integrity and purpose, it will inevitably fail. For a business to succeed, it also has to acknowledge that the days of 'top-down' communications are gone; no longer can a business operate by speaking only to government decision makers – both are under closer scrutiny from the

The bottom line: only when a business operates from a position of integrity can they earn a license to lead, and in doing so can help rebuild public trust in government leaders. As 2013 unfolds, businesses now have the opportunity to lead in APAC. The only question is, will they take this opportunity and run with it or will next year's Trust results indicate another lack of leadership?

public and stakeholders and conversations are being driven from all sides by activists, leaders, stakeholders and peers. So what does this mean for businesses either already operating in APAC or looking to expand? First, there is currently a big gap between the amount of trust people have in government institutions and their trust in their leaders. Citizens are demanding and expecting more, and are increasingly disappointed with the result. Second, businesses now have a unique opportunity to help bridge this gap by working closer with government to define and solve the issues most important to each market. However, in order to succeed, a business must first lead by example through transparent and ethical business practices.

Cindy Tian Vice Chairman, APAC Public Affairs Practice 13

CHINA CONUNDRUM: TRUST INSTITUTIONS, NOT LEADERS No nation has risen as quickly and as peacefully as China over the last 30 years. No modern government has so successfully elevated the living conditions of so many people. No other economic system has produced such phenomenal growth on such a massive scale. It is no wonder that the 2013 Edelman Trust Barometer shows both the general and informed publics of China trust the institutions that have improved their lives. Against that backdrop of organizational trust, the Barometer's recording of Chinese disillusionment with leaders at all levels stands in stark relief. While 67 percent of the general population trusts business, only 32 percent trusts business leaders to tell the truth. While 71 percent trusts government, only 24 percent trusts government leaders to tell the truth. The public harbors major concerns with the ethics of leaders. Citizens decry unequal access to business opportunities, education and wealth. Complaints of official corruption have reached such epidemic levels that the recent 18th Party Congress saw both exiting Party Secretary Hu Jintao and his successor, Xi Jinping, name corruption as the greatest threat to Chinese society. When forming opinions on these issues, to whom does society listen? What are the trusted sources of information? The Barometer shows Chinese digital media in all forms has grown to the levels of traditional media in importance. While traditional sources remain the most trusted source for 30 percent of the Chinese general population, 50

percent of the general population now looks to social media and search engines – and that percentage grows to 67 percent in the informed publics. China highlights the interesting differences between emerging and developed markets on this point: when looking at social media, emerging markets (58 percent) are more than twice as trusting as developed (26 percent). Social media has become the virtual village square for China. It is here that popular culture is formed, brands are promoted and complaints are aired. This is the environment in today's China. It is a society that will more quickly believe a Weibo post by an employee than a newspaper interview with a CEO. It is a society that holds international brands from North America and Europe in higher regard than its own. It is a nation of growing national pride that is remains deeply scarred by its "Decade of Humiliation," when weak institutions allowed its land and its people to be overrun by foreign powers. Organizations and individuals must understand these dynamics to engage this society. They must consider that, more than a country with a singleparty government, China is a state that serves a single party. There are few countries in the world where the government is so integrated into the daily life of its people. But, the Communist Party of China wisely understands that trust in the institution does not translate to trust in the individuals. It did not for imperial ministers of the Qing Dynasty and it does not for today's Politburo

关于爱德曼信任度调查 2013爱德曼信任度调查是爱德曼公司连续第13年进行的年度关于信任及可信度的调查。本次调查由Edelman Berland专门的调查公司完成。调查采用在线问卷的形式,全球26个国家进行。20分钟的调查问卷于2012年10 月16日至11月29日间进行。调查对象包括年龄在25至64岁间的普通公众26,000人,有识公众5,8000人。"有识 公众"指受过高等教育,家庭年收入在该国家该年龄组前25%,有阅读或观看商业新闻习惯,并持续关注新闻中 的公共政策信息。如需更多信息请点击http://trust.edelman.com/或致电001212.729.2166


members. In assuming party leadership last November, Xi noted there had been a "separation" of government from society and set "rejuvenating the nation" as the Party's primary goal.

constant peer-to-peer dialogue resulting in a new diamond of influence. Smart institutions will use vertical one-way communications while continually participating in the ongoing horizontal conversation.

Xi is calling for cadres to engage more with the people, look after society's needs and ensure the general population understands the party's role. He understands the trust between people, party and state must be nurtured and grown. The government also understands its need to partner with third parties on areas of social concern - such as food safety, rural health and education – where its expertise is still growing. This presents a very positive opportunity for enterprises to engage.

NGOs (non-governmental organizations) are the one of the highest rated institutions in China by informed publics (81percent) and the highest rated among general population (73percent.) The most trusted spokespersons are technical experts, peers, NGO representatives, and academics. Organizations must look to these third-party endorsers to bring credibility to their stories. And, they must live up to their words with their deeds.

What a company does, as well as how it does it, are now both dependent upon trust and credibility. Running a profitable business and having top-rated leadership no longer, alone, build long-term trust. In fact, these operationalbased attributes have become an expectation. Today in China, business builds trust by treating employees well, exhibiting ethical and transparent practices, delivering quality products and services, and finding opportunities to partner with government entities to address areas of development outlined in the 12th Five Year Plan.

Going forward, leaders in state owned enterprises, private businesses, media and government bodies from central to township must practice Inclusive Management by acting transparently in sharing reasoning and results. They must look to engage a broader range of inputs from society, actively listen to the public discourse. They must show adaptability and, above all, they must partner to meet the needs of this better educated, more affluent and increasingly vocal population.

Business must also change the way it engages stakeholders. In an era of skepticism, people need to see or hear something three to five times in different places before believing it. They gather knowledge and learn equally from traditional and social channels. The traditional pyramid of authority, with elites driving communications top down to mass audiences, is now joined by an inverted pyramid of community – employees, action consumers and social activists involved in real-time, horizontal,

Thomas Mattia Chairman, China 15


Technology continues to be the most trusted industry per Edelman's 2013 Trust Barometer. A position held consistently for over the past seven years globally. And perhaps a reflection of the optimism and joy it brings to our lives day in and out. Looking through the hour glass I wonder if it will continue to be the most trusted in the next decade. One could argue you can't always stay at the top, and if you are, there is only one way – down. However, the answer, to a large extent, depends on how companies proactively adapt to the changing demands of stakeholders and deliver against the key drivers of Trust – yes, the stakes are high. We are entering an era of big data where storing valuable personal and company information in the cloud is becoming almost free with global pervasive access anytime anywhere and on any device. This fast moving trend presents significant challenges for governments, business and societies at large. They'll need to find ways to enabling the benefits of this technology led lifestyle transformation while providing for new ways of dealing with the inherent threats that these technologies bring along with them. Privacy is one such risk that can have a substantial impact on business operations, cor porate reputation and trust. Not worrying about privacy can cost business time, money and perhaps even impact their license to operate. Media scrutiny has reached an all-time high. And events over the past few years demonstrate that there exists a big gap between stakeholder expectations and what companies are doing to address these concerns. Not a week goes by without a company or an entire industry in the news for an alleged privacy violation, causing significant harm - Google paid $22.5 million to settle FTC charges for misrepresenting privacy assurances and Facebook


had to comply with EU Data Protection Law and dump facial recognition. The growing volume and sensitivity of information being shared, stored and used is driving demand for greater transparency about how it is being managed and protected. Listening to customer needs and ensuring transparent business practices are critical attributes companies should embrace to ensure they continue to enjoy being trusted to do what is right. In the same vein, there are also implications for guardians of brand trust i.e. communications professionals – in the words of Richard Edelman, "It is time for us to move from managing perceptions or projecting images to changing reality. Changing reality is a further evolution of Public Relations, towards Public Engagement. We must do as well as say and advise on policy as well as communications, to deliver a demonstrable impact." Among other things, 2013 Trust Barometer throws light on the challenges faced by technology brands in Asia Pacific with ambitions of growing their footprint beyond domestic shores. Data shows that companies headquartered out of emerging markets like China and India face an uphill task in overcoming trust deficit especially as they enter developed markets. Media reports on trust issues faced by ZTE and Huawei as well as Samsung, among others, is reflective of the hurdles that lie ahead. How you do your business and build an offer is becoming more important if not equal to what you create and offer. Also, traditional media continues to be the most trusted type of media source but it is important to note the closing of trust gap with search, social, hybrid and owned media. This is particularly apparent in countries where media is in part controlled by the government (Singapore, China

to name a few) where the increasing influence of social media is widely recognized. An engagement led approach to communications requires for companies to build sustainable platforms that deliver compelling, multi-purpose programs across all media channels while ensuring repetition that helps satisfy attention deficit disorder of a society that is increasingly living on instant-gratification. Another significant insight of note is the trust deficit in CEOs to tell the truth when faced with a difficult situation. Technical experts, employees and a person like yourself are seen as more reliable sources of information while shaping opinions about company's offer, culture and integrity. Companies need to prioritize engaging these critical stakeholders while defining brand values and shaping the face of its ambitions in markets outside of home. Overall, the beauty of technology is that it transcends every other industry and aspect of life - future megacities in emerging markets of China, India and Indonesia will essentially be built from scratch, enabling a blank-slate approach to infrastructure design and implementation that could allow for the most effective deployment of new urban technologies or create urban nightmares, if such new technologies are not understood and deployed effectively. Breakthroughs, especially pertaining to the security of vital resources will be necessary to meet the food, water, and energy needs of the world's population. New health technologies will continue to extend the average age of populations around the world – an industry carrying such burden on its shoulders has a lot to lose and must act responsibly. But, to do so – the industry's worldview requires a new lens - quality products and performance are important but expected as a given. Engagement

(listening, communicating and treating customers and employees well), Integrity (ethical and transparent business practices) and Purpose (mutuality of interest with NGOs, Government and society at large) are company behaviors that will define and drive sustainable trust. Yes, stakes are high. But so is the trust in technology as an industry to do what is right is on us to live up to the expectations through meaningful actions.

Sanjay Nair Regional Director, Technology Practice APAC 17

HONG KONG: A TRUSTED BUSINESS HUB IN ASIA PACIFIC The second year of Edelman's Trust Barometer in Hong Kong was one filled with high-profile scandals, bribery charges, arrests and accusations in both business and government. This was balanced with renewed optimism in business and recognition that free speech is still a powerful force in Hong Kong. The year of the Water Dragon started with the arrest of billionaire brothers who run Hong Kong's largest property developer Sun Hung Kai on bribery charges. Frustration and anxiety continued to simmer over mainland China's rising influence and a widening gap in wealth distribution. The 2012 summer will be remembered for the protests against government plans for patriotic 'National Education'. Suspicion of Beijing and disenchantment for new leader CY Leung are both at an all-time high. And yet trust in Hong Kong has risen and the territory remains one of the most trusting societies in the world. It is now ranked globally as the fifth most trusting market. The SAR saw an increase of 6 percentage points in its overall composite trust score* to reach 67% among informed publics, 10 points above the global average and rising three spots in the global ranking of trusting countries. Last year's Trust barometer showed trust in business in Hong Kong was significantly lower than in most Asia-Pacific countries, but in line with global results. However, this year's findings show a significant 13-point increase in the trust

of businesses in Hong Kong, while global trust in business rose five percentage points, all among informed publics. These numbers appear to reflect a shift in perception of how Hong Kong sees itself in comparison to other so-called 'old' global economies, such as Europe. This shift may indicate a stronger association of Hong Kong to Asia and that it is a steadily becoming more trusting market. The economy has kept its footing and trust has risen dramatically in businesses, reinforcing the city's credentials as the business and finance hub of Asia, and bolstering its appeal to foreign investors. Despite increased competition from Singapore and Shanghai, Hong Kong is still the place to do business. The improved financial performance of bluechip companies may be a key driver of this as the barometer of Hong Kong's stock market, the Hang Seng Index, rallied 23% in 2012, the best return since 2009. Interestingly, much of this economic momentum was generated locally within the city, rather than delivered from China. The best performing members of the benchmark stock index last year include Hong Kong companies New World Development and Wharf Holdings, outshining many of the mainland firms. But there is an interesting paradox for business and government In Hong Kong. We trust the institutions of business and Government but we see a crisis of leadership. Trust of businesses to

關於愛德曼全球信任度調查 (Edelman Trust Barometer) 《2013年度愛德曼全球信任度調查》是愛德曼公關進行的第十三次年度信任度與信譽調查。該調查由專業研究公司 Edelman Berland進行,有關研究包括於2012年10月16日 至 11月29日展開時長逹20分鐘的網上訪問。《2013年愛德曼 全球信任度調查》網上調查全球26個國家及地區中的26,000名一般公眾受訪者及5,800 名「有識公眾」,受訪者年齡 介乎25至64歲。所有有識公眾均符合以下標準:擁有大學學歷、家庭收入達到該國家同齡人士收入前25%的水平,每 周至少多次閱讀或觀看商業新聞並持續關注新聞中的公共政策資訊。如欲了解更多詳情,請瀏覽http://trust.edelman. com/或致電212.729.2166。


do what is right is at 43%, while trust in business leaders to tell the truth is at 20%, a 23 percentage point gap. Trust of government to do what is right is at 53%, while trust in government leaders to tell the truth is at 17%, a 36 percentage point gap. In Hong Kong, a market that values democracy, this points to a need for both governments and businesses to be more transparent. Across the board trust is stable or improving. Nongovernmental organizations (NGOs) in Hong Kong earned a 76% score in the 2013 barometer, up 6 percentage points from 2012, and compares with the 63% global response. Trust in government was 63%, beating the global response of 48%. Trust in media in Hong Kong is at 68% compared with the 57% global rating. To a large extent, however, businesses deserve credit for helping the city's economy weather weaker growth in global trade, as financial concerns linger over the triumvirate of the U.S., Europe and China. Strong corporate management and improved business competitiveness has helped companies in Hong Kong thrive in an uncertain environment. Most Hong Kongers still look back with unease at the protracted economic downturn that was precipitated by the Asian Financial Crisis in 1997. With memories of those painful events still lingering, the public is no doubt grateful that they have not been reprised amid the present global economic challenges. Increased public trust in corporations in Hong Kong may also incentivize companies to review commercial opportunities in the city, as overseas

investors aim to take advantage of the goodwill towards businesses and the city's vibrant economy. Annual foreign direct investment in Hong Kong rose to a record US$83 billion, according to the United Nations Conference on Trade & Development's World Investment Report published in July 2012. Hong Kong's largest companies are now more international than ever, taking advantage of lower asset prices post the 2008 Global Financial Crisis to acquire overseas businesses. Achieving global recognition is one of the key attributes helpful for companies to build trust, and the expanding overseas investment portfolio of many Hong Kong businesses may have helped them earn increased credibility from the public. In 2012, Hong Kong Exchanges & Clearing, operator of the city's securities exchanges, completed its acquisition of the London Metal Exchange for 1.4 billion pounds. CNOOC Ltd., a Chinese energy producer incorporated in Hong Kong, is close to clinching a US$15.1 billion purchase of Nexen in Canada. Credibility is, as always, an important part of success here. Hong Kong is a unique place with a unique culture, sensitive to scandal and the influence of mainland China. Because of its special characteristics and circumstances, trust in Hong Kong carries a disti nctive meaning. However, government may be less trusted because of a perception of corruption and ties to Beijing. Businesses, too, must be sensitive to this, or they may face embarrassment and even protests, as did Dolce & Gabbana when it attempted to prevent Hong Kong residents from taking photos of its local flagship store in favor of mainlanders a year ago. When it comes to who Hong Kongers identify as


the most credible spokespeople, among informed publics regular employees of a company saw the sharpest year-on-year increase of 12 percentage points to 63%. They are followed by technical experts with a year-on-year increase of 10 percentage points to hit 70% overall. NGO representatives and academics or industry experts hold the top position as the most credible spokespeople, both at 73% among informed publics. Trust in NGO representatives as spokespeople rose 9 percentage points, whereas academics or experts gained 3 percentage points. A "person like yourself" also rose 3 points to 67%. The least credible spokespersons are financial analyst 54%, a successful entrepreneur at 53%, a CEO of a company at 48% and a blogger and a company's board of directors both at 45%. An entertainer or athlete is at the bottom of the list at 40%. Clearly companies need to rethink who they put forward as spokespersons. In a celebrity and CEO driven culture like Hong Kong, real questions start to arise on whom may best represent your company. MTR Corporation has taken the lead with its employee centered campaign launched last year. We now look forward to see what the year of the snake has in store. This year's rise in trust is significant and allows businesses and institutions to build on their past successes – they need


no reminders that trust is fragile. The successful know that winning and retaining trust from their stakeholders is an ongoing effort, and they need to continually invest in branding, communications and public engagement as an integral part of their business operations.

Andrew Kirk Managing Director, Hong Kong 21

THE MARGIN BETWEEN TRUST AND HOPE IN INDIA The Indian results of our annual Trust Barometer for 2013 continue to surprise. With an aggregate score of 71 across all four key institutions (business, government, media and NGOs), India has risen to be the third most trusting nation among the 26 surveyed this year, after China and Singapore. This is a whopping 15 point jump from our 2011 survey, when India was in ninth place globally. While that score is lower among the general population (64) than our 'informed public' respondents, India actually ranks second globally among the former group. The overall trust level – and its stubborn rise over the past few years – may seem somewhat dissonant to those of us on the ground, who have witnessed economic slowdown and been exposed to a steady diet of scandals across institutions. As we delve into this year's results in more detail, we will attempt to resolve this apparent dilemma. Are Indians just unflinchingly optimistic? Is corruption so entrenched that expectations are simply reduced? Or, are the scores more reflective of a hope that the country can overcome its ills, and a need to trust someone, to rely on someone to lead the way? AND THE WINNER IS … This year's results confirm that in India, Business is clearly that 'someone'. The magnitude and frequency of scandals over the years would lead one to expect this to be a 'lesser of evils' choice. The numbers belie this, however: Trust in Business among informed publics rose 12 percentage points, topping the charts at 81 percent. The trust gap between business and government, moreover, continues to widen. "Corruption or fraud" was the top reason given for not trusting either – listed by 45 percent of respondents who reported trusting business less over the past year , and a full 77 percent of those who reported trusting government less. So, what has Business done to deserve the rank of people's champion? Well, corruption aside, the economy has continued to grow, jobs continue to be created, and Business has done a reasonable job of positioning itself as the agent of change in India – at least in comparison to the other institutions. And what of Government? Its consistent score at the lower end of the spectrum seems immune to significant swings in either direction. One is tempted to believe that the Indian people have given up; that expectations of Government are low, and people have simply placed their hopes elsewhere.


The second big winner this year is clearly the media, up 9 points to 79 percent. After a few years of significant decline, trust has roared back, ostensibly recognizing the media's return to its rightful role of exposing – rather than participating in – corruption. Trust in NGOs remained flat, suggesting they made little progress in fulfilling the role of 'independent arbiter' that people had ascribed to them a year ago. HOLD ON A MINUTE … Before India's Business leaders crack the champagne, however, it must be noted that trust generally – and trust in them specifically – is a very fragile commodity. Among our 'general public' respondents, for example, while trust in Business is at 68 percent (81 percent for informed publics), only 34 percent "trust Business Leaders to tell the truth". Only 20 percent "trust Government Leaders to tell the truth", though 55 percent of our general public respondents (and 57 percent of informed publics) claim to trust Government generally. Repeating their performance from last year, the most credible spokespeople were deemed to be an "academic or expert" (82 percent), a "technical expert in the company" (77 percent) and a

"financial or industry analyst" (77 percent) with CEOs in the middle of the pack at 73 percent. One wonders whether in this instance, faith in Indian Business is actually intended for the broader economy, with Business reaping the benefits. And as recipients of trust, moreover, not all industries are created equal. In India, technology (90 vs. 92 percent a year ago), Automotive (88 percent both years) and Energy (86 vs. 78 percent) lead the charge, while Brewing & Spirits (75 vs. 58 percent), Food & Beverage (78 vs. 73 percent) and Pharmaceuticals (79 vs. 75 percent) bring up the rear. AN OUTSIDE PERSPECTIVE One might wonder whether other countries share India's bullishness about its businesses. Sadly, the answer is a categorical "No". Among informed publics, global trust levels for companies headquartered in India stood at a mere 34 percent. Only Mexican companies were rated lower (31 percent). To be fair, all emerging markets lagged in this particular measure, but the result still indicates that Indian Business faces a significant reputational challenge beyond Indian borders. And this challenge is focused squarely on developed markets, where the trust figure reached only 29 percent – whereas 50 percent of respondents in other emerging markets expressed trust for Indian companies. As Indian business seeks to expand globally, carry out trade with other markets, invest in those markets, this negative perception could become a limiting factor. WHERE TO FROM HERE? All of this begs the question: How does one build trust? Over the years, our research has identified a series of attributes that enable companies to build trust. These attributes fall into five categories: engagement, integrity, products & services, purpose and operations. Of the top ten attributes ranked in order of importance by our Indian respondents, four relate to Engagement, three to Integrity, and one each to products, purpose

and operations. It is interesting to note that the gap between importance and performance per our general public respondents is significant: of the top ten criteria, the average differential between the percentage of respondents finding a criterion to be important, and those attributing that criterion to Indian companies, is in the high teens. So while 68 percent of respondents find it important that companies "listen to customer's needs and feedback", only 49 percent feel that Indian companies actually do this. While 61 percent believe that a company should "have ethical business practices", only 44 percent think Indian companies achieve this standard. This gives us some insight into how companies are being evaluated – and how they can build trust among key stakeholders. Indian business clearly has an opportunity. This year's Trust Barometer results suggest that both segments of Indian society we surveyed – informed publics and general population – have placed their hopes on Business to drive change. High trust also means high expectations, however. And potentially, a high price for failing to live up to those expectations. The benefits of trust in business and societal terms can be tremendous, just as the costs associated with distrust can be great. Every opportunity has a downside. Trust is difficult to build, but quite easy to lose. Trust is, by definition, fragile. Hope? Even more so.

Robert Holdheim Managing Director, India 23

Indonesia at an inflexion point in political trust?

2014 will be a year of remarkable change in Indonesia: parliamentary elections and then elections that will deliver a new President (President Susilo Bambang Yudhoyono is termbarred). Indeed it is quite remarkable how quickly politicians have focused on 2014 elections and there is growing concern from some quarters how this may affect how government interacts with business. Towards the end of last year – and just before the Indonesian fieldwork for the 2013 Edelman Trust Barometer - electors in Jakarta staged a major political upset, unseating the incumbent governor (very much of the political establishment) and elected a populist reformer, Joko Widodo (known popularly as Jokowi )1. While Indonesia's political and financial elite were unnerved by the Jokowi phenomenon they must have been relieved that, just very recently, officials from the elections commission approved only 10 political parties to run in the 2014 elections and all but one of these comprise the current political elite2. The President's party is trying other ways to make itself popular3. We are entering a time of great political uncertainty but – like Italy in the 1980s – political uncertainties need not get in the way of impressive economic growth. So how does our Trust Barometer throw more light on this background? Well, after the nadir of 2012 – when trust in government by informed publics fell to just 40% - it has recovered slightly to 47% in 2013's results. Given the background, these results are not nearly as bad as government might have feared. But, as we drill down into political trust, we see a more nuanced picture: globally 50% of the general public surveyed, who distrust government, do so for reasons of corruption, fraud and the wrong incentives driving policy: in Indonesia this figure is 71%. Globally about one third of government distrusters cite incompetence:


in Indonesia only 22%. So the Indonesian public perceives a dishonesty in government, more than its incompetence. For political parties who wish to succeed in 2014, our Trust Barometer results suggest they need to convince on honesty more than effectiveness. As with last year, trust in media (by informed publics) remains high at 77% and trust in business at 74%. Yet again this year we see an unusually low trust in NGOs (51%). We can only speculate as to why Indonesian publics have such a low level of trust in NGOs. In some cases it is known that NGOs here are clumsy 'front' organizations for vested interests but, given the huge donor funds pumped into Indonesia by international NGOs, there clearly is an important challenge for them in achieving effective community engagement that many of these organizations have still to crack. We'll be returning, later, to this issue of community engagement. When we look at trust in different types of media we see the huge importance of social media in Indonesia: trust by general public in social media is high at 68% (41% globally) and last Fall we saw a dramatic example of how a massive wave of Twitter protest – using the hashtag #dimanaSBY ('where is SBY?') - literally forced the President to make a public statement about a corruption probe4. The power of social media really can drive political response in Indonesia – and this will be a heightened feature of this political season – which means firms relying upon a 'top-down' approach to their business operations may find themselves ill-prepared and out-maneuvered if they don't pay adequate attention to popular sentiment. Indonesia is a huge recipient of foreign direct investment so it is interesting for us to look at how sources of that investment are viewed. Firms headquartered in Brazil (trusted by only 49% of

informed publics) and India (49%) seem to have an image problem in Indonesia: and trust in firms headquarted in these countries fell by 10 and 11 points respectively between 2011 and 2013. China was more trusted (63% & only 57% of general population) but this too saw a 12 point fall from 2011's results and may reflect China's wider image and foreign policy challenges in the region5 . Trust in Russian firms was flat at an anaemic 62%. Trusted foreign investors in Indonesia (all above 70%) were the UK, USA, Germany, Japan (92%!), South Korea and Switzerland. Edelman is witness to the rising tide of 'emerging market to emerging market' FDI, so these trust scores from BRIC countries investing in Indonesia are a real concern to us because the efficacy and success of their investment may be diluted if they cannot carry the support of key external stakeholders (workers and community especially) with them.

So let's drill down at what builds trust in business in Indonesia. Firstly let's look at how the global general public rate the 16 attributes that Edelman has identified build trust (and how they score companies' performance in achieving those attributes): Globally we can see the general public rate engagement (light blue) and integrity (green) attributes as the most important in forming trust, in a pretty clear-cut prioritization over, say, operational performance factors (dark blue). Now let's look at the results for Indonesia. Almost at once we can see it is a very different picture, with a much different ranking of what Indonesians think most important in building trust in companies.

Along with listening to customers, treating


employees well is the top slot in Indonesia (70% vs. 61% & 3rd globally). Ethical business practices is the second most-ranked company trust attribute in Indonesia (69% vs. 58% & 5th globally). But then interestingly we see two good purpose attributes rank high in Indonesia whereas they don't globally: protecting the environment (68% in Indonesia,3rd vs. 53% & 8th globally) and positively impacting the local community (67% in Indonesia, 4th, vs. 47% and 10th globally). This tells us a lot about where some of those BRIC foreign investors may need to do more communications in Indonesia: -Don't over rely on elites and using just the media; - there needs to be real grass-roots outreach, empathy and action for large employers employee engagement is mission-critical not a nice-to-have -Indonesia is a country marked by a strong sense of community and common good over me and self-interest and therefore good purpose really matters here.


For some firms, these results deliver a clear red flag because not getting these issues right – like how employees are perceived to be treated – can do real damage to brand reputation and, in consumer markets, may adversely affect consumer behavior. Our Trust results for Indonesia therefore suggest that Nike, for instance, recently attacked locally6 because of the alleged actions of its manufacturing subcontractor, needs a more highly active labour outreach program. Equally, concern over its reputation in China as an employer has caused real problems for Foxconn and it would be very illadvised if it thought political cover would keep a lid on any labour issues in Indonesia. Actually, now, it would be the other way around. So Corporate Social Responsibility programs are essential in Indonesia. Companies struggling to understand why their reputation in Indonesia isn't as good as they want it to be should first look at their employee engagement and CSR programs. Often a Cinderella afterthought in some companies' programs, in Indonesia it is at the heart of successful corporate reputation. Looking ahead, as we confront a period where

1. http://globalvoicesonline.org/2012/10/28/indonesia-jokowi-phenomenon-in-jakarta/ 2. http://www.thejakartapost.com/news/2013/01/09/editorial-room-election3. http://www.thejakartaglobe.com/news/democratic-party-to-sign-up-more-celebs-as-golkar-pdi-p-balk/565994#Scene_1

political trust may remain low, companies may find that basing their business operations and corporate reputation on government elites just doesn't get them the results they want or expected. Between now and Fall of 2014, and a new settled Presidency, the Indonesian public is going to be loud, occasionally bellicose and it will drive policy and government response. That means – for large-scale FDI – there is a real necessity for wellthought through community relations programs, in affected areas, and more focus on employee engagement than might be thought necessary in some other countries. In closing, there is one piece of good news for corporate leadership. Globally amongst informed publics the CEO is a trusted spokesperson by just 43% (2nd bottom but a 5 point rise on 2012's poor results), in Indonesia trust in CEOs as a credible spokesperson is 55%. There is an opportunity for CEOs in Indonesia to lead from the top on these good purpose and engagement issues and build on the potential offered by Indonesians trust in business.

Stephen Lock CEO, Indonesian businesses & Head of Public Affairs, South East Asia 4. http://www.thejakartapost.com/news/2012/10/10/in-kpk-saga-growing-power-social-media.html 5. http://online.wsj.com/article/SB10001424127887324712504578132992010156924.html 6. http://www.huffingtonpost.com/2013/01/15/nike-indonesia_n_2481236.html


JAPAN - LACK OF TRUST NOW EMBEDDED Erosion of local premium provides window of opportunity for Western companies in #Japan

"YOU CAN' T EVEN TRUST THE TUNNELS" In December of last year, a tunnel on one of Japan's key arterial highways collapsed. Amongst the grief and sadness that followed this accident the comment of one lady stood out. "You can't even trust the tunnels in this country anymore." Following the complete collapse in trust across all institutions, seen in Japan last year, the burning question was, has there been a rebound? The short answer is, "no." A year on, the level of overall trust among informed publics still remains at the bottom of the 26 county ranking, only slightly above that of Russia. Despite a revolving door of governments and political leaders, and a trail of corporate scandals, historically trust was surprisingly stable in Japan. On reflection, the huge drops in trust seen last year now seem not to have been a reaction to the earthquake, tsunami and nuclear disaster, but the result of frustrations pent up over a number of years. The 3-11 disaster was simply the straw that broke the camel's back and changed the trust profile in Japan. As illustrated by this woman's reaction to the tunnel incident, this year's Trust data reinforces how widespread and deep seated the lack of trust in institutions really is. We venture that trust in

institutions has been permanently damaged, and that Japan is now closer to Europe than other Asian countries in its trust profile. POST DISASTER RECONSTUCTION ISSUES STILL INFLUENCING TRUST While there was a small rebound in trust across the board, trust in government remained lowest at 36%.* This was almost equaled by a low level of trust in NGOs at 38%. In 2011, trust in NGOs was at 54%, almost in equal to trust in business.* The perceived failure of NGOs in post-disaster relief and reconstruction and concern over what was done (or more to the point, not done) with donations has led to trust in NGOs in Japan being about half that of the global average. And the number of people that trust NGOs a great deal, at 6% is well below the global level of 22%. People seem to have lost faith in the ability of NGOs to bring about any real sustainable change and transparency remains a huge issue. EROSION OF THE DOMESTIC PREMIUM The mono-cultural nature of Japan means local businesses and brands have historically attracted a trust premium over their foreign competitors. Over the past year we have seen well-known Japanese names like Sharp, Panasonic and Sony announce huge financial losses and layoffs and come in for global criticism that they have lost the edge in innovation and growth to South Korean or Chinese companies. It was recently revealed in a number of news reports that the domestic companies that had been awarded all the contracts to clean up radioactive soil and such

エデルマン・トラストバロメーターについて 「2013 エデルマン・トラストバロメーター」は、今年で13年目となるグローバルな信頼度調査です。本調査は調 査会社Edelman Berlandが、2012年10月16日から11月29日にかけて、26カ国で25歳から64歳の26,000人の一般回答者 と5,800人の知識層を対象に、一人当たり20分のオンラインインタビューを実施したものです。知識層とは、学歴が 大卒以上で世帯収入が各国の同世代と比較して上位25%以内、少なくとも週に数回はビジネスや公共政策に関する ニュースを見たり読んだりしているか、もしくはそうした情報に関心を持っている人を対象としています。詳細に ついては、http://trust.edelman.com/をご覧ください。


*Data cited refers to Informed Publics, Ages 35-64

in Fukushima had in fact been cutting corners that had inadvertently led to a spreading of radiation. Not one clean-up contract was awarded to a nonJapanese company. Events like this have combined to cause Japanese to lose faith in their own companies. About one person in ten among both informed publics and the general public does not trust Japanese companies. At the informed public level this represents a fall of 10 points to 71% over the past two years. Informed publics now have almost as much trust in companies from Germany (67%) as they do in companies from their own country. This decrease in trust in local companies is providing opportunity for foreign companies. It is interesting to note that not one of the top 10 selling smartphones in Japan is produced by a Japanese manufacturer. In recent consumer surveys, foreign airlines have ranked above Japanese airlines for service. The local premium is beginning to erode. The time is right and the door is now open wider for foreign companies in Japan. However, the opportunity is not equal for all foreign firms. The territorial rights issues with China, Russia and South Korea seen over the past year have had a large impact. Trust in Chinese companies has plummeted 27 points to a mere 3%, Trust in South Korean companies and Russian companies have similarly fallen 25 points to 16% and 14% respectively. Trust in other developing markets such as Brazil (24% - 13 points) and India (29% - 15 points) seem also to have been dragged down. The longer-term economic impact of the politically-triggered territorial issues cannot be denied and while the erosion of the local premium means the door is open wider for foreign firms in Japan, it will be the western firms from developed

markets that have the greatest initial advantage. Companies from developing markets, particularly China and South Korea will have to make significant efforts to display their commitment to Japan and build trust to overcome the unfortunate side-effects of political disturbances. INTEGRITY AND TRANSPARENCY NEEDED Why are Japanese companies losing the trust of their countrymen? Globally, wrong incentives (remuneration) and corruption together are cited by 50% of respondents as the key drivers of falling trust in business. In Japan, these two were only selected by 28% of respondents. Japan does not have a high salary gap between senior executives and employees and corruption is not seen as a huge issue. By far the largest reason for trusting business less is poor performance or incompetence (35%). When we look at the attributes for building trust in Japan we also see a picture that may suggest greater opportunity for companies from the developed world. Integrity-related issues, such as whether a company takes responsible action in the face of a crisis and whether it has transparent business practices are not only the areas where stakeholders have the biggest expectation of business but also the areas where they most feel business is not performing. 48% of respondents cite transparency as important to them but only 8% believe companies are doing well in this area. Engagement-related issues also feature prominently. 45% of people cite communicating frequently and honestly on the state of the business but only 8% feel a good job is being done. Integrity and transparency are two areas in which Japanese companies have traditionally felt that they do not need to make an effort. Many feel the


longevity and legacy of their brand is enough to promote their integrity to stakeholders. This year's Trust Barometer data indicates that this is clearly no longer the case and Japanese companies need to become more proactive at communicating these factors. At the same time, western companies, which have a longer history and experience in communication of integrity and transparency, probably have a small window of opportunity to leverage that experience in gaining a competitive trust advantage in Japan.


Ross Rowbury President, Japan 31

TRUST LAGS AS PUBLIC SEEKS 'ECONOMIC DEMOCRATIZATION' The past few years have been rocky ones for South Korea. Having enjoyed a neutral ranking within the Trust index in our 2011 Trust Barometer survey, Korea dipped into distrusted waters two years ago as global trust levels fell, but has not seen the recovery to neutral ground that other industrialized nations such as the US, UK, France and Germany have in 2013. A 'crisis of leadership' is certainly to blame, though one of a different sort from its peers. Fortunately, there is light on the horizon. South Korea's crisis of leadership is broad-based. It reaches into nearly every institution, though its impact is felt most in the Korean government and turbocharged business community. We are one of the few developed nations where trust in government is higher than business, although neither institution enjoys high trust scores at all. In fact, credibility of business among the informed publics remains at a steady low from 2012 and government support in Korea slightly lags behind the global average. It's in this stunning departure from the industrialized norm, however, that we find our strongest evidence for future change. We must first address an important caveat to the data, which were fielded just prior to the election of Park Geun-Hye, Korea's first female president. The final months of the contest generated significant excitement and hope for change and followed on a number of high-profile prosecutions of major business and government figures. Results show that Koreans overwhelmingly rank corruption or fraud as a driver for trusting institutions less; these aboveaverage standards, while not enough to put a damper on continued corrupt practices in business and government, were a strong driver in this year's results nonetheless.

The biggest buzz word of the presidential race was "economic democratization", or the realization of a fair market economy that protects small- and midsized businesses and consumers from the still-growing influence of Korea's family owned conglomerates, or chaebol, who constitute a massive share of GDP. Ms. Park appears to have succeeded in convincing voters she is serious in challenging big business and increasing welfare—something her party, the incumbent administration, lacked the willpower to seriously address. She was challenged by Ahn Chulsoo, a medical doctor turned software entrepreneur turned academic who also brought a lot of optimism to the contest. Fearing, however, that he would split the liberal vote, Ahn dropped out of the race and put his support behind the more established but ultimately unsuccessful Moon Jae-in. Paradoxically, trust in spokespersons from these key institutions is reversed—with CEOs seen as more believable than most senior government officials. This is most likely due to societal bias towards the perceived standing of executives compared to that of those in government service, aside from the president and few others. But while global confidence in business increased in the past year, in Korea it remained at a low. Specifically, 31% of Koreans do not trust business leaders to tell the truth—a 10-point increase over the previous year, among the general population.

에델만 신뢰도 지표조사 (Edelman Trust Barometer) 올해로 13주년을 맞이하는 2013 에델만 신뢰도 지표조사는 신뢰에 대한 조사다. 에델만의 자회사이자 조사연구 전문 기관인 에델만 벌랜드(Edelman Berland)를 통해 2012년 10월 16일부터 11월 29일까지 온라인 설문조사로 실시되었다. 조사 대상은 전세계 25개국 여론주도층 5,800명(25-64세 연령층)을 포함한 일반 대중 26,000명이다. 여론주도층은 대 졸이상의 학력, 해당 국가 내 해당 연령층에서 상위 25%의 가계소득, 주당 최소 수 차례 이상의 비즈니스/뉴스 미디어 구독 또는 시청 및 주당 최소 수 차례 이상 정책 현안을 파악하는 등의 기준으로 선정했다. 2013 에델만 신뢰도 지표조 사에 대한 자세한 정보는 http://trust.edelman.com/에서 확인할 수 있다.


This is no less than a public referendum on the state of business in Korea. The rationale for this is three-fold: continued imbalance in the treatment of big business versus all others; lack of broad social support by Korean enterprises in general; an increase in the global expectation for corporations — which coincides with a change in Korea's own standards, toward judging Korean companies on a global scale and not just against their local and regional peers. It's this last point that is perhaps the standout finding of this year's survey for Korea. We are at a crossroads for public perception of big business in Korea. How will the market react? Will business leaders sit up and listen? What, if anything, will change? It is not all bad news for corporations in Korea. We remain consistent from many of our APAC peers in our general support for small business, albeit unsurprising given the current environment. What is unexpected is the degree to which trust in financial services and banks has recovered since 2012. The credibility of these institutions is buttressed by their standing in society as true drivers of individual and small-business growth. But there are continued obstacles toward achieving more than a neutral standing, as the past year has seen mortgage debt rise, personal information breaches and the bankruptcy scandal of a small financial institution. These issues were sufficiently contained, but are very real and longterm reputational threats. An additional reputation driver for the financial sector in Korea is the perception that only a limited number of the scandals and capital losses in the sector are within any one business' control. Globally, nearly 60% of respondents thought individual institutions were responsible; in Korea, only 37% of the public views

the issue in this way. Far and away the biggest reason cited for scandals: Korean banks are too large. And the public doesn't hold the banks responsible for solving this, at least for the time being. While NGOs still enjoy their status at the top of the charts, trust in Korean media did not increase at the pace seen globally in the past year. Correspondingly, media companies dropped to last of all industries in this year's study. This can partly be attributed to questionable governmental appointments to relevant posts, which sustained criticism of the sector. Driven by Korea's world leading electronics manufacturers, technology dominated the top of the charts with more than a double-digit lead on the second most-trusted industry, energy. We continue to share in the region's infatuation with digital and mobile, with faith in information delivered through social media in Korea at nearly double the average in the developed world. Those providing mobile access haven't done quite so well recently, as telecom companies remained some of the least trustworthy while enduring a number of recent scandals and government interventions. The most improved industry of the year was by far consumer packaged goods, which returned to neutral territory from only a 35% support level. Meanwhile, prescription law reform and advances in biotech and biosimilars may have led to some perceived improvement in the credibility of the health sector. Across all industries, South Korea-based companies remain in the middle of the pack globally, though they are generally distrusted in the eyes of its developed peers, especially in North America, UK and EU. This is offset by broad support in developing nations and


the APAC region, apart from Japan and China, where territory and trade issues are ongoing. The inverse is also true: Korean informed publics rate Japanese businesses 31points lower than just two years ago. For China, we've seen a 24 point trust discount over the same span. I mentioned a light on the horizon, which is the potential for increased overall trust in intuitions— government in particular—as Ms. Park moves her agenda forward. We know from our years of study that engagement and integrity are the most important attributes for building trust in Korea. And while our current position mainly reflects the poor performance of business and leadership, it's our sincere belief that business will more than listen, but begin to truly lead.


SB Jang Managing Director, Korea 35


After almost one year of speculation, rumors and much gazing into the crystal ball, the much awaited General Elections are expected to take place in the first quarter of this year. The Trust word has achieved celebrity status with "Trust us to …" or "Don't Trust them to…" making its rounds across all media, mouthed with abandon by all sides of the political divide. What's clear is that all parties are hawking their past performance and reputation to exhort voters to 'Trust' what they will do when the elections are won. The fragmentation of media and resulting dispersion of authority of traditional news source have seen the digital and social media landscape gaining significant traction, with both the ruling coalition and opposition pact raising the stakes to ensure their messaging is getting across and amplified in the right quarters. It is interesting to note that the Prime Minister has been actively seeking to win the middle ground back with his messages centering on trust and confidence. The Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP), two innovative programmes that were implemented by the administration of the Prime Minister in 2010, has made remarkable and impressive progress on the ground. The GTP objective is to improve the efficiency of the public service delivery system while the ETP aims at improving the competitiveness of the economy and private investment to meet the stated target of Malaysia achieving high-income status by 2020. In the 2008 election, after years of frustration of being left out of development, we saw the Indian community defect from ruling party to the


opposition. In a run-up to this election, the Prime Minister has been actively courting the community and working hard to earn the community's trust on the premise of 'Nambikei' which translates from Tamil as "trust, hope or confidence ". It is seen as a strategy to win back Indian votes based on the sentiments of Indians to vote for a leader they trust to take care of the community. He has set up a task force to look into the plight of the community and allocated a significant budget to upgrade socio-economic standards of Tamils in Budget 2012. Likewise, the Prime Minister is doing the same with the Chinese community by engaging with them, assuring them that his administration is listening to their needs. This has even taken the form of a mandarin Facebook site named 'Ah Jib Gor', a play on the PM's name – Najib – to signify him as a friend of the community. Against the backdrop of the Malaysian government working hard to earn back the trust and confidence of voters by engaging and providing financial support to the various ethnic groups, this year's Trust Barometer study, Malaysia's second year included, has seen a rise in trust in government (from 49% last year to 60% this year among informed publics) while trust in business has slightly slipped. However, the intensity of trust in government still remains fragile with only 21% 'trusting the government a great deal'. It is also interesting to note that while the government is pushing a policy of economic liberalisation and expansion, trust in business has slipped. The issues around the perceived lack of compliance with regulatory and environmental issues as seen in the Lyans Rare Earth plant, RAPID Petroluem hub, MRT land

acquisition process and Malay rights in business seem to be reflected in the Trust data this year. Only 23% of Malaysians surveyed 'trust business a great deal'. On the reverse, with NGOs forming the bulwark against the perceived trampling of a variety of rights in Malaysia, trust in NGOs has risen to 76% among informed publics. A recent rally which managed to attract over 50,000 people from various NGOs into the Merdeka Stadium in the middle of the city to voice their displeasure would be reflective of the trust levels in NGOs to do the right thing for the nation.

Malaysia should take heed as there appears to be a lacuna when the general public was asked specific questions on how business and government were delivering on expectations. Clearly Malaysians want to see 'placing customers ahead of profits', 'treating employees well', 'communicating frequently and honestly on the state of business' and has 'transparent and open business practices' from their government and business leaders. In effect, what Malaysians are saying is that societal and not merely operational attributes, are critical towards building trust and getting that all important vote of confidence.

Most surprisingly, media saw a significant jump in trust from 47% in 2012 to 60% in 2013. Going by the cloverleaf, trust in traditional media and online search engines were at 61% and 70% respectively, while trust in hybrid, social and owned media came in at above 50%. Like in most countries, Malaysians need to hear information repeatedly from multiple sources before they believe them these days; 68% of Malaysians need to hear things three to five times. This implies that companies and brands need to have continual engagement and communications to build trust. Once again this year, the academic or expert, technical expert in a company and a person like yourself have emerged as the most credible spokespeople while the CEO and Government official or regulator still remain the some of the least credible spokespeople, despite an improvement from last year's trust levels. So, in the final analysis, track record and reputation aside, it seems that business and government in

Raymond Siva Managing Director, Malaysia 37

SINGAPORE SEES THE WISDOM OF THE INSTITUTION, BUT MAY NOT TRUST THE INDIVIDUALS WHO LEAD IT On the surface, 2012 didn't seem like the type of year in Singapore where trust in government and business would go up, with slow economic growth1 and a series of high profile scandals2 both for government and business. But not only did trust in business and government go up, it did so at a pace greater than regional and global averages. Singapore is now the second most trusting country in the world, and has the highest levels of trust in government globally. According to the 2013 Edelman Trust Barometer*, conducted in 26 countries worldwide to measure levels of trust in institutions, Singapore's total trust score rose by nine points – three points more than the global rise . Trust levels in Singapore rose across three of the four institutions measured, including Business (up 11 points), NGOs (up 11 points), and Government (up 9 points). That Singaporeans remain trusting overall should be no surprise; they've been ranked as a top trusting country since 2010, the first year trust was measured in Singapore. But why did Singapore continue to grow in trust despite being exposed to one scandal or issue after another? A closer analysis of the 2013 Edelman Trust Barometer results shows us that trust was negatively impacted in some ways, and that there are steps institutions can take to improve. As Edelman fielded the study in market, Singapore's inflation forecasts were being revised upward3 , and there was widespread (if muted) conversation about how Singapore was already too expensive to raise a family 4 . And yet, Singapore was ranked as the World Bank's easiest place to do business for the seventh consecutive year5, and the government launched its National Conversation on Our Singapore6, in response to a citizen-led need for more open dialogue with the government following the 2011 elections.


CRISIS IN LEADERSHIP Even as the economic environment seemed to cast a shadow over Singapore, the government continued to perform well, and the business environment remained stable throughout the year. This stability is what we see reflected in the high trust numbers across all institutions in Singapore. While institutions are recognised for performance, the scandals have taken their toll on trust. There is a significant gap between how much Singaporeans trust the government and businesses, and how much trust Singaporeans have in the leaders at the top of those institutions to tell the truth. Only 19 percent of Singaporeans trusted business leaders to tell truth when confronted with a difficult issue, 41 points lower than the total trust in business overall. And while more expressed trust in Government leaders at 23 percent, the gap between trust in Government leaders and the Government itself was 49 points. Individual leaders are not getting the credit for the stability and strength of their institution, which are perhaps already deemed stable, but do take the blame when things have gone wrong. When we looked at the reasons behind distrust in the leaders of business and government in Singapore, for both institutions, transparency issues were cited as the key factor. This trend plays out in detail in the financial services industry. While Singapore has been far from the centre of the financial scandals in recent years, its role as a regional financial hub makes it highly sensitive to and aware of challenges the industry faces. Financial services is the least trusted industry in Singapore at 63 percent (still 13 points higher than the global result for the sector, reflecting the distance from the biggest scandals), but even here, corporate culture is seen as the biggest cause of industry issues (29 percent in Singapore, vs. 23 percent globally). Corporate




19% 29%


62% of causes of  scandals are  internal and  within business’  control  

15% 3%






Q161. [ASK IF FAMILIAR WITH BANKING SCANDALS (Q160=VERY/SOMEWHAT FAMILIAR)] Based on the information you have read, seen or heard about the banking/ financial services scandals,  specifically those at Barclays, J.P. Morgan and Standard Chartered, what do you think is the BIGGEST cause of these scandals?

culture and compensation are managed internally, by leaders and employees, and are less impacted by external factors than other potential causes. REINFORCING THE PILLARS OF TRUST As we compare Singapore to the global data, we find a few clues as to how leaders may be able to close the gap in trust. The Edelman Trust Barometer has helped us identify the 16 attributes which form the pillars for building trust. Based on these attributes, we can see that the quality of products is the single highest trust building attribute globally, followed by a range of engagement (light blue) and integrity (green) attributes.

The Singapore data shows us a different set of priorities. Based on the top three trust building attributes in Singapore (Listens to customer needs, takes responsible actions to address a crisis or issue, and has ethical business practices ) we see a gap of greater than 30 points between the importance of those attributes and how well companies in Singapore are performing. All three of those attributes can be, and should be, addressed at least in part by business leaders. CEOs and regular employees may be among the two least credible spokespeople in Singapore (at 54% and 50%, respectively), but they are potentially the most effective spokespeople at demonstrating responsiveness to customer needs,


reacting to crises, and personifying ethical business practices. A PATH FORWARD As we move further into 2013 and towards the Singapore budget release at the end of February, it will be revealing to see how far in front the Government is willing to put individual leaders during what may be a challenging period. To build trust in Singapore, the Trust Barometer data demonstrates that it is imperative to consider the following:


•Identify ways to provide a higher degree of transparency as a business or government institution •Understand stakeholder expectations and perceptions about performance •Leverage the most relevant trust building attributes to advance set goals and close the gap between expectations and performance •Enlist involvement of credible stakeholders such as an academic or expert, technical experts, NGOs, and "a person like yourself". Engagement with stakeholders must be looked at not only as something that starts at the top, but something that must also incorporate the community.

1. http://www.singstat.gov.sg/news/news/advgdp4q2012.pdf 2. http://sg.news.yahoo.com/blogs/what-is-buzzing/review-singapore-biggest-stories-2012-104555050.html 3. http://www.channelnewsasia.com/stories/singaporelocalnews/view/1232972/1/.html 4. Survey: 50% couples not having babies because 'Money No Enough' 5. http://data.worldbank.org/indicator/IC.BUS.EASE.XQ 6. https://www.oursgconversation.sg/

*The Edelman Trust Barometer, now in its 13th Edition, surveyed 31,800 respondents across 26 countries, making it the most robust exploration of trust and reputation worldwide.

Amanda Goh Managing Director, Singapore 41

The 'How' of Building Trust in Asia Pacific: CSR & Sustainability CRISIS IN LEADERSHIP There is a crisis of confidence in leaders of business and government across the globe. When you look at Asia Pacific's two largest markets, China and India, there is real cause for concern. According to this year's 2013 Trust Barometer, there is a significant trust gap between institutions and their leaders – trust in government in China is a full 47 points higher than it is for government officials. This massive gap makes sense when taking into consideration recent high profile government scandals, such as the removal of Bo Xilai from the highest ranks of government following the exposure of personal corruption. At the same time, however, trust in business in China is 35 points higher than trust in business leaders, which suggests that the crisis in leadership in China extends beyond government. In India, the gaps between government and business with its respective leaders (35 point gap in government and 34 point gap in business) are similarly wide. Around the Asia-Pacific (APAC) region, the story is much the same. NEW STAKEHOLDER EXPECTATIONS So what does this trust gap have to do with C or p or ate S oc ial R es po n sib ility (C S R) & Sustainability? Well, actually quite a bit. Global economic instability, persistent misdeeds by visible leaders, and growing social and environmental problems have altered the expectations that APAC stakeholders have on business and its leaders. Gone are the days of blindly trusting business as a reward for delivering consistent financial returns to investors. Today, stakeholders expect business to run a profitable business as a minimum. To build long term trust, business must now also treat employees well, listen to customers, ensure ethical business practices, protect the environment and invest in


communities up and down its value chain. Put another way, today's trust in APAC business is not only dependent upon 'what' a company does (operational), but also 'how' it does it (societal). The State of CSR & Sustainability in Asia Pacific CSR & Sustainability – if done correctly – is the 'how' of building trust in Asia Pacific. Yet despite significant growth in CSR & Sustainability investments in this region over the past few years, most companies are not reaping the trust lift that the practice has the potential to deliver. So how do you build trust through CSR & Sustainability? Five Ingredients for Building Trust in APAC through CSR & Sustainability Based on Trust Barometer findings, along with our own experiences and recent events over the past year, here are five elements that must be addressed if CSR & Sustainability is to help the business build trust. While the principles apply globally, there are some nuances to consider in the APAC region: 1. Clarity 2. Relevance 3. Integration 4. Transparency 5. Credibility CLARITY The first step is to ensure that CSR & Sustainability has a clear pur pose in the context of the company's business objectives. This sounds obvious, but many companies do not take the time to determine exactly where they stand on

the CSR & Sustainability spectrum. This is important, because there will inevitably be instances in which economic incentives come up against CSR & Sustainability commitments. While the business may state and believe that it must operate 'responsibly', the description is too vague to provide clear direction to functional teams at a practical level. Senior management must first determine and agree on why they are investing in CSR & Sustainability. How will it support business objectives? Is it designed to manage risk, improve operational efficiency, or strengthen stakeholder relations? What are the expected outcomes? Once this position is determined, setting a strategy with clearly defined targets across functions will help to ensure that activities are included in core operations and decisions can be made when tradeoffs are encountered. RELEVANCE Listening to customers, employees, and other stakeholders and taking into consideration these outside views is a fundamental attribute of building trust in APAC. In the context of CSR & Sustainability, this means understanding which societal issues are relevant and to what degree the business is expected to address them. The term often used in CSR & Sustainability circles to describe this is 'materiality'. Business is not expected to address every societal issue. Let's look at an example of a large electronics company operating in the region. If the extent of this company's CSR & Sustainability work is an annual charitable donation to a local cause that does not relate to its business, and one or two regional employee volunteering days, the potential benefit to the business is limited. Stakeholders would much rather know how this same electronics company addresses labour issues in its supply chain in China, or how specific

environmental impacts of its product are being improved along its value chain. INTEGRATION Stakeholder engagement is the foundation of any CSR & Sustainability practice. However simply understanding societal impact is not enough. As in the case of the electronics company, stakeholders expect to see and hear about how the company is addressing those issues through policy, partnerships, programmes, operational changes, and reporting. Yet integrating CSR & Sustainability into the operations of the business is very difficult. It requires significant internal engagement with employees across functions, levels, and geographies. Here is a simple example. If a large coffee company runs coffee bean farmer training in Indonesia and has a page dedicated to describe the issue on its website, is the barista serving coffee to a customer in Kuala Lumpur able to answer questions about it? If the answer is yes, then CSR & Sustainability is integrated. TRANSPARENCY In APAC, business has a tendency to shy away from communicating about its social and environmental performance. There are a couple of reasons for this. One reason is that business in this region has not traditionally been expected to communicate about these issues. Financial disclosure was enough. Some company's, therefore, resist this new communications expectation. Another reason is corporate culture. Culture that


has been nurtured for decades around 'being humble' when it comes to social contributions has created internal communications barriers that impede business from informing stakeholders of this now critical performance area. This is particularly distinct in the APAC region. Maintaining corporate culture is important, of course, but the tension between communications expectations and culture must be addressed if trust is to be established. CREDIBILITY Business is not expected to address the issues alone. According to this year's Trust Barometer, globally, four out of five markets with the highest trust in NGOs are in APAC (China, Malaysia, Hong Kong, Singapore). Partnering with NGOs in this region, therefore, brings credibility to CSR & Sustainability investments, particularly if the NGO partner becomes an advocate for the company. To derive most value from NGO partnerships, business should learn from the NGO's expertise to improve the specific societal impacts of their business. Finding mutual ground at the outset of the partnership is key. Today's crisis in leadership presents an opportunity for business to fill the expectation gap, particularly on how institutions address societal issues. Effective CSR & Sustainability plays a big role in 'how' companies in APAC meet those expectations and build trust.


Ashley Hegland Director, Sustainability and CSR Practice 45


Contact us: relationships@edelman.com

Profile for Edelman Asia Pacific

Trust in Asia Pacific 2013  

The world's fastest growing and most dynamic economic region is broadly a trusting one, but the profile of trust varies hugely from country...

Trust in Asia Pacific 2013  

The world's fastest growing and most dynamic economic region is broadly a trusting one, but the profile of trust varies hugely from country...


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