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In a speech I presented earlier today at the Chautauqua Institution’s CHQ Assembly, I discussed the opportunity to push forward after coming through the biggest trial of our lives. After sharing seven mega trends over the past 20+ years, I stressed that progress will only come through our recommitment to: compromise, innovation, facts and a global economy. But this is all based on a recommitment to trust.

Trust is built upon relationship, reliability and predictability. We need all four institutions of Business, Government, Media and NGOs to effectively partner in order to deliver on that. Trust brings tangible benefits from employee loyalty to stock price premium to brand preference.

With trust, there’s hope for tomorrow. Tomorrow demands trust.

Please read my full speech below.

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In the mid-1990s Francis Fukuyama’s book Trust: The Social Virtues and the Creation of Prosperity laid the foundation for studies of societal trust. Fukuyama’s study coincided with the triumph of liberal democracy over Communism—the fall of the Berlin Wall and the breakup of the Soviet Union.

Fukuyama argued that in this new global context only those societies with high levels of trust and “social capital”, supported by strong legal frameworks, would be able to compete successfully in the burgeoning global economy.

Fukuyama contrasted Korea and America as low trust and high trust societies. Korea had too much connection between wealthy families and the government—the system seemed unfair. The U.S. was the shining example of a strong legal system, financial transparency, with free and fair elections and a separate business sector.

Fukuyama’s argument was that trust enables an efficient economic system and growth. What a difference 25 years makes. Today, autocracies have the most trusting populations and best-performing economies, while democracies are riven with populism, factionalism and have slow growth.

The Battle of Seattle in 1999 informed the creation of the ������Ƶ Trust Barometer, when NGOs stormed the World Trade Organization to protest globalization as an unfair distribution of wealth. After this protest, we decided to evaluate trust in institutions, viewing this as a more accurate gauge of trust.

We have since conducted an annual study of trust for the past 21 years, plus several special editions on trust in brands, systemic racism, effects of the pandemic, voting rights and more.

As a result, here are seven megatrends of trust over that period.

1. NGOs as the most trusted institution

As of the year 2000, NGOs were the most trusted institution in the world and that continued for 19 years. This reflected a dispersion of authority away from classic leaders and traditional institutions of government, media and business.

NGOs had no shareholders, no voters—just people with a focus and a mission.

NGOs continued to be at the top of the roost for 19 years. Why?

Effectiveness and ethical conduct by institutions were the new constructs for trust, with a premium on the latter—competence was assumed, but ethics were far from baked in. Up until last year, NGOs were the only institution seen as ethical, hence they were the most trusted.

2. The emergence of the mass class divide

First, let us define the divide:

• Informed publics earn the top 25 percent of income, are college-educated and consume 3-4 forms of media per day. They have very different opinions than the mass population.

The mass class divide was a delayed reaction to the reality of job loss, the housing crisis and downward mobility caused by the Great Recession of 2008–2009. In prior recessions, people not only bounced back, but ended up in a better position. After this recession, they never regained their prior status. As the Pew Institute concluded, “today’s real average wage has about the same purchasing power it did 40 years ago.”

The mass class divide started in three countries.

• US: The 2008 government bailout led to huge gains for hedge funds, while 13 million Americans lost their homes. Donald Trump was elected by those aggrieved by unfairness.
• UK: Brexit shocked the world in 2016. It was very anti-elite. Prime Minister David Cameron unleashed the forces of nationalism with the referendum.
• France: Macron entered the Presidential race as a total outsider with his own new party. In his first year, he was seen as the Establishment by the Yellow Vest protesters in the countryside aggrieved by a higher tax on gasoline.

The mass class divide is now transversal. Trust scores for informed public are rising but have yet to rebound for the mass population, a result of the stark contradiction of booming stock markets and continued systemic health and economic inequities. Our Spring Trust Update of this year’s ������Ƶ Trust Barometer showed that the pandemic led to a record trust gap between elites and mass population of 17 points—the widest we’ve seen, with double-digit trust inequality in 13 of the 14 countries studied.

Canada, Saudi Arabia, Brazil, France, UK all have record trust inequality with a gap of 15 points or higher between the informed public and mass population. The largest divide of all the countries was in Australia—a stunning 28-point gap.

3. Fear has overwhelmed optimism

Fears have eclipsed hope. The pandemic has accelerated those fears. Job loss continues to be a top concern around the globe. Our Trust Barometer last year showed that 83 percent of the general population (that is both the informed population and mass population combined) were worried about losing their jobs.

Our Spring Update from this May found that, ‘increased mental health problems’ (55 percent) rank as the most profound negative consequence of the pandemic.

There is also a gender gap—women fear the most. Fortune ran an article on the impact of job losses among women in the labor market, in February—the headline— “Nearly 80 percent of the 346,000 workers who vanished from the U.S. market in January are women”. It went on to state that “working women have now lost more than three decades of labor force gains in less than a year.”

There are new concerns about climate with 70 percent now saying that Climate Change needs to be taken more seriously as a threat to human life. Sixty-seven percent believe we are amid a dangerous Information Crisis and 58 percent say their country is too reliant on other countries for essential products, a new nationalism.

Fears of immigration peaked two years ago but remain a factor for the working class due to concerns about downward mobility.

We need to consider the historic fears around acceptance of new technologies. For example, the legacy fear in the Black community from the Tuskegee experiments that started in the 1930s has led to vaccine hesitancy.

With growing fears, who is there to trust?

4. The Fall of Government and The Rise of Business

Government as recently as May 2020 was the most trusted institution, with a huge bump in western markets and China. It was the only institution seen as capable of managing the biggest global crisis since World War II.

With the lack of effective action in response to the pandemic, specifically the delayed distribution of vaccines and protective equipment, government quickly lost its halo.

Today, government trust is 23 points below My Employer and nearly 10 points below Business.

Government is 40 points less competent than business and 20 points less ethical.

Business clearly outperformed government in dealing with the pandemic, even on classic issues that are in the government realm. Responding to the health and public safety aspects of the COVID-19 pandemic (45percent business versus 40 percent for government); Driving economic growth and job creations (45 percent versus 35 percent); Guarding information quality (39 percent versus 34 percent); Addressing systemic inequalities (35 percent versus 30 percent). However, the decline in government trust is a western-only phenomenon.

India, UAE, Saudi Arabia and China all have high trust in government – with China’s trust in government gaining 6 points (at 88 percent) between January and May of this year while business fell by 15 points (at 68 percent).

Business has risen to the top for the first time as the most trusted institution as of January 2021. Business performed well during the pandemic. At 62 percent trust, business is the only institution seen as both ethical and competent. With this trust comes new expectations of CEOs, who are looked to speak out on issues such as pay/fair wages, the environment, and diversity, equality and inclusion.

5. Trust goes local and horizontal

Trust has seen a dispersion of authority. It has moved from the classic top-down, which is dependent on traditional leaders such as CEOs or Prime Ministers, to horizontal (a person like me) and local (My Employer and My CEO). People still value vertical information but it is academics and technical experts that are the most trusted sources of that information as independent and credentialed sources.

Why is trust local? An employee or a consumer can hold a company or brand responsible on a daily basis. We as individuals spend most of our time at work—or on Zoom calls.

My employer (77 percent) is more trusted than the traditional four institutions but with that comes ever-expanding expectations by employees.

Globally, employees expect their employer to act on societal issues including vaccine hesitancy (84 percent); climate change (81 percent); the infodemic (80 percent); racism (80 percent); automation (79 percent); and immigration and border security (70 percent). Why is trust horizontal? Somebody ‘like me’ is now the most trusted source of information.

We started to see that about a decade ago with the rise of social networks.

It was reinforced by the millennial focus on work as the center of life. Trust is then simultaneously vertical, horizontal and local.

6. The Activist Employee and the Empowered Consumer

The pyramid of authority has flipped on its head.

We started to see this a few years ago as the #MeToo movement gained momentum and has continued with protests against systemic racism.

Consumers and employees believe that they have the power to hold businesses to account.

Employee walkouts at tech companies in protest over a variety of issues demonstrate the action and impact of the activist employee.

For the first time, employees have become the most important stakeholder group to a company achieving long-term success (40 percent), three times higher than shareholders (14 percent). Fifty percent of employees are more likely now than a year ago to voice their objections to management or engage in workplace protest.

There are similar expectations for brands to speak up and stand up.

Brands are realizing that there is opportunity to align with the interests of their consumers—such as Nike using former San Francisco 49ers quarterback Colin Kaepernick in their advertisements—he was alone in kneeling during the national anthem at a 2016 pre-season NFL game, a statement that started a conversation, then a movement.

Sixty-three percent of consumers believe they can force a brand to change almost anything about itself and 78 percent believe that their influence extends beyond the consumer experience to a company’s societal impact.

7. The Infodemic Further Weakens Institutions

Democracies in particular rely on an informed populace able to make proper decisions. That’s why a vibrant media has been referred to as the fourth estate of government but it’s failing in its job.

For the first time, media is the lowest trusted institution. It’s been on this downward path for a long time, but its demise is fueled by social media.

There is a crisis of facts—the infodemic is real and it’s spurred by not only disinformation, but thought bubbles based on opinion.

You only look at the content you agree with. There’s poor information hygiene for nearly 40 percent of the population—a reliance on a single source and sharing of stories without checking the veracity.

We have a heavy reliance on social, but social media ranks lowest in trust. And Traditional Media has dropped 13 points in trust in two years to 52 percent.

Employer media (59 percent) is now the most believable source of information ahead of National Government (54 percent); media (53 percent); and social media (35 percent).

Media is failing on information quality too. Our 2018 trust findings saw half of our study respondents had walked away from traditional media because it was biased, chasing clicks and too upsetting to read.

The business model is worsening the problem. One-third of large U.S. newspapers had layoffs in 2020 (those with circulation over 50,000) as did half of the newspapers with circulation over 250,000, according to the Pew Institute, with only half as many reporters in newsrooms as a decade ago.

Solutions must center around the new power dynamic

Trust in institutions is deeply dynamic at the moment – constantly rising and falling - in 2019 NGOs topped the tree, in 2020 it was Government and in 2021 it was Business. That’s a very uncertain ecosystem.

Our research has found that there are four key factors to establishing trust: Ability accounts for 25 percent and Dependability, Integrity, Purpose account for the remaining 75 percent.

We use these dimensions in our assessment of which institutions will lead in the future.

Our best bet is that business will continue to lead the traditional institutions, but business is also volatile (recessions, overreach, scandals). Business will have to fill the void left by Government. Government is often falling on Ability and Integrity. However, our research found that Government was the most trusted institution to lead us to a better future.

NGOs were the default leader in trust for 19 years but have receded in importance in people’s minds during the pandemic. They must get back to a leadership role, particularly on sustainability.

Media is the least likely to regain trust in the short run given economic headwinds and audience bias. There will need to be objective voices, whether state-owned (BBC) or through angel investors.

Critical Trust Issues for the Coming Decade

1. We have to confront grievances

• These include relations between countries, which cannot be based on grievance. Xi Jinping remarked just last week that there are 1.4B people ready to stand up to anyone who “bully, oppresses or subjugates China”—they are basing their aggression on the aggression by foreign powers.
• We are also having right and left debates on critical race theory, which has been demagogued—we have to bring people back to the middle.
• The only way to overcome the grievance that is undermining trust is to tell the truth. We need to have an honest discussion about the problems confronting society.
• Similar to what Germany did after the Holocaust, we need to undergo the same examination of facts on slavery, inequality and bigotry.
• We need to re-examine history—tell the stories that we have failed to include in our education systems and update our history books based on facts. An example—the 1921 Tulsa Race Massacre.

2. We need to deal with the fear of job loss through upskilling

• With the fears of health, safety, wellbeing—the thing that will make all these better is helping to prepare people for the future. Upskilling is essential to that effort.
• McKinsey’s 2017 Jobs Lost, Jobs Gained Report estimated “that between 400 million and 800 million individuals could be displaced by automation and need to find new jobs by 2030 around the world.”
  • The biggest changes are going to come in retail and financial services—it is going to be 20 percent of those jobs.
• Business must lead on areas of comparative advantage—retraining, skills development and innovation.
• Funding tuitions, offering retraining and other upskilling programs. Take Starbucks for example—their partnership with ASU to help their partners (employees) earn degrees, gives workers a chance to compete.

3. We have to address climate change and sustainability

• The COP 26 conference in Glasgow this Fall will be critically important to discuss progress and commitments going forward.
• The hardest part is going to be to changing consumer behavior (i.e., cold water wash). This is beginning to happen in the food arena with plant-based alternatives.

4. We must deal with the jab and jab-nots

• The developing world is falling farther behind. The elections of populists in South America reflect deep skepticism about capitalism.
• The risk of new variants increases geometrically with continued outbreaks in Asia and Africa.

The pandemic has changed attitudes, behaviors and in a way, it has put a spotlight on the things we value most.

People want to spend more time with their families. They are more interested in the “We” than the “Me” and they care about the big issues facing society.

We have been through the biggest trial of our lives and from it, there’s hope and opportunity to push us forward.

Sixty-four percent say that as horrible as it is, this pandemic will lead to valuable innovations and changes for the better in how we live, work and treat each other.

This is a moment for us to recommit:

• Recommit to compromise: As many are in the midst of return to office plans, employees have made it clear that they want flexibility, and some aren’t willing to travel at the same frequency as they were pre-pandemic. Let us re-evaluate our needs because over the past year we’ve shown the impossible is possible.
• Recommit to innovation: The examples I shared with you earlier on business actions—let’s continue to raise the bar in how we define and create impact across society’s most pressing needs.
• Recommit to facts: People share false information 10x more than fact-based information. Let’s get back to quality.
• Recommit to a global economy: The world benefits from trade leading to equity. As one example, we need a joint solution for the preservation of the rain forest in the Amazon.

How we do all of this is based in trust. At the core of trust is relationship, reliability and predictability. It takes all four institutions of Business, Government, Media and NGOs partnering to deliver on that. There are tangible benefits from trust, from employee loyalty to stock price premium to brand preference. Tomorrow demands trust.

Richard ������Ƶ is CEO.