23rd November 2011
With an anti-capitalist mood sweeping the western world, and demonstrators camping out across Europe, financial institutions would do well to learn from those companies making progress in the trust stakes, by engaging their communities and embracing the spirit of transparency. In turn, investors can profit from this growing trend.
Creating a safe environment
Google, for example, is using clever tactics to ensure users feel part of a transparent, citizen-based network, launching its "Good to Know" campaign promoting online safety in association with the Citizens Advice Bureau (CAB). Using adverts in newspapers, on public transport and online, the two organisations are encouraging users to adopt secure passwords, and log out of web browsers and computers when they've finished using them.
Meanwhile, Facebook has made known that it has a strict real name policy to ensure transparency with its social networking service, with recent reports on the battle between award-winning author Salman Rushdie, who wanted to use his middle name – Salman – on his profile. But Facebook, which has strict real name policies, insisted he use his actual first name – Ahmed.
‘We fundamentally believe this leads to greater accountability and a safer and more trusted environment for people who use the service,' said Elliot Schrage, vice president of public policy at Facebook, to the New York Times.
Building intangible assets
But how can financial institutions create a more trusted environment? There is clearly a new, democratic, digital conversation going on around them through the likes of Twitter, and they are not in control of their own message any more.
The radical transparency of our rapidly evolving social world means there has never been a more critical time for business leaders to be inspiring communicators, alongside developing their social strategies. This is one of the focal methods they can use to establish relationships and trust, which are now so crucial to success.
Whether referring to our current political landscape, financial company CEOs or high-street brands, decisive, inspiring leaders are key to success.
Kevin Murray, chairman of public relations agency Bell Pottinger, says in his book the language of leaders: "Leaders are under more scrutiny than ever in this transparent world and building trust and engaging employees are key drivers of success. Few leaders are taught the critical communication skills that enable them to be inspiring, yet the difference between competent communication and inspiring communication can be the difference between poor performance and outstanding results."
Murray explains here: "…modern leaders must be better communicators and, above all, focus on building trust, because trust is a prerequisite of successful leadership.
"Trust is increasingly viewed as the hidden asset on their balance sheets, and many leaders I interviewed say that organisations which want to survive and thrive in the age of transparency must place the building of trust at the heart of their strategies."
Social transparency and accountability
There are many ways companies can shift towards greater transparency, aside from establishing strong leaders, says blog Accountability 2.0. It comments on the use of technology for transparency, citing Poder Ciudadano in Argentina. Their Money and Politics platform enables citizens to access previously impenetrable datasets on the funding of parties and election candidates, bringing clarity to its political landscape.
The need for accountability is now widespread. Elsewhere, a working paper of the Corporate Social Responsibility Initiative, says that fuller transparency and disclosure is needed, particularly with respect to corporate governance and performance. More companies and intermediaries will figure out ways of using interactive technology to meet the challenge, and do so with more enduring success.
Surviving the crisis – and profiting from transparency
Given the mistrust provoked by financial crisis, companies are increasinbly being held accountable for their mistakes – likely to be hauled under the media spotlight and lose customers.