WEF focuses on trust in post-pandemic world

THE World Economic Forum (WEF) has long been perceived, by critics, as an exclusive club for the world's globalised elite. It will therefore be ironic, for some, that the theme of this week's important annual event is rebuilding societal trust, post-pandemic.

Yet, scepticism aside, this trust topic is essential for the world to address given populist political surges, rising economic inequalities and the 'post-truth' phenomenon. And the end of the Trump presidency in the United States may provide the right moment for the world to turbocharge this conversation.

Indeed, the fact that the flagship annual WEF summit is being held virtually - for the first time ever this week - offers a potential opportunity to extend the Davos dialogue to much broader cohorts beyond the leading politicians and corporate leaders who normally attend. For instance, Sunday's opening event is openly accessible on YouTube.

Government keynote speakers this week include Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, French President Emmanuel Macron, German Chancellor Angela Merkel, Singapore Prime Minister Lee Hsien Loong, South Korea President Moon Jae-in, and president of the European Commission Ursula von der Leyen. These politicians are joined by other leaders who are speaking including UN Secretary-General Antonio Guterres, World Health Organization (WHO) director-general Tedros Adhanom Ghebreyesus, International Monetary Fund managing director Kristalina Georgieva, and European Central Bank president Christine Lagarde. While new US President Joe Biden will not join the event this year, key administration officials, including his chief medical adviser Anthony Fauci, will be among the speakers and panellists.

The goal of rebuilding trust is not just an important end in itself. It is also key, indirectly, to enable rebuilding the world's social and economic systems in the wake of the novel coronavirus crisis with forward-looking, fair and sustainable solutions for a post-pandemic world.

Opinion surveys for decades have shown that trust has eroded in many elites and institutions. Moreover, the standing of a number of governments, especially in the West, has been further set back by perceived mishandling of the pandemic.

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Yet, while trust in many politicians continues to weaken, some surveys simultaneously point to a rebound in perceptions of business, on measures including competence and ethics. This potential trend is interesting as the opposite phenomenon - declining confidence in business, especially among the young - was one of the key legacies of the international financial crisis which started around a decade and a half ago now.

That, prior, growing distrust in business was shown not just in numerous opinion polls, but also by the significant protests since then, including the 'Occupy movement' which came to international prominence in Wall Street in 2011 in its campaign against social and economic inequality. The occupy demonstrations, often driven by younger people, subsequently spread to around 1,000 cities and over 80 countries in all continents of the world from Canada to Norway to New Zealand.

One manifestation of this rising tide of distrust had been that stakeholder belief in what many corporates said and did had been undermined. This posed new hurdles for firms looking for new, innovative ways to reconnect with publics and communities, especially in a world where there had already been longstanding, and growing, backlash to the private sector on issues such as executive pay, through to international trade and globalisation.

Many businesses have sought to rebuild trust in the approximately decade and a half since then through longstanding, tried and tested techniques like creating good new jobs and investing in the economy, while paying workers fair wages and benefits. Yet, beyond this, a growing number of firms have used new ideas to restore credibility and some of this may now be paying off in terms of public opinion.

One example is founded on the apparent paradox that while there had been growing distrust of business, many people nonetheless expect the private sector to play a greater role in society. This includes helping tackle the range of problems facing the world from climate change to growing economic inequality.

'SHARED VALUE'

Of course, firms have long had sustainability, social responsibility, and/or philanthropic programmes to address such issues. However, the challenge - and potentially opportunity - is greater now, giving rise to what leading Harvard academic Michael Porter has highlighted as a new way for firms to secure competitive advantage by creating 'shared value' for society as well as shareholders.

Perhaps the key idea behind this shared value concept is that the corporate competitiveness and the health of society at large are mutually dependent and reinforcing. Thus capitalising on the connections between societal and economic progress, including tackling challenges ranging from climate change to the obesity crisis in many countries, can help drive growth for years to come.

Another example of how corporates have sought to rebuild trust stems from the public opinion insight that while faith in big institutions and many elites - including CEOs - has taken a hit in recent decades, trust in everyday stakeholders - including family, friends and colleagues - who are perceived to have more authenticity and legitimacy - has been growing. And this trend relates to a second key feature of the last couple of decades with the digital revolution, changing the way many of us consume information through social media.

Research shows that public recommendations from family, friends and colleagues we know and trust, are becoming increasingly influential in shaping views and opinions. One way business is harnessing the power of this shift is through empowering a new breed of grassroots advocates to help rebuild trust.

For instance, employees and supply chain partners have significant credibility and legitimacy as third-party validators. And social media has significantly increased the level of influence that these single persons or organisations can have, in building (or potentially eroding) trust.

Taken together, the innovation that many businesses have shown the last decade and a half in reconnecting with society may contain insights for wider institutions and elites too. This is not just an academic exercise for the challenges facing the world, post-pandemic, will best be addressed with greater cohesion and trust right across the private, public and third sectors in a massive, integrated recovery effort.

• The writer is an associate at LSE IDEAS at the London School of Economics