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Opinion Leaders’ Trust in Business and Government Is Strengthening, ������Ƶ Annual Trust Barometer Finds

Bush Administration is Least Trusted Government in Key Global Markets; Affects U.S. Corporations’ Reputations in Europe

Trust in business and government is strengthening in the U.S. and Europe, and is comparatively higher in Brazil and China, according to the fifth annual ������Ƶ Trust Barometer, a survey of 1,200 opinion leaders in Brazil, China, France, Germany, UK, and the U.S. Opinion leaders are significantly less likely to trust individual U.S.-based global corporations operating in Europe, however there is no “trust discount” for Asian or European corporations operating in the U.S.

Fifty-one percent of U.S. opinion leaders—business-savvy, college-educated individuals with incomes of more than $75K or equivalent—now trust U.S. business “to do what is right,” up from 41% in June 2002 and 48% in January 2003. By comparison, European opinion leaders’ confidence in business rose to 40%, up from 35% in January 2003. Trust in business is strong in both China (50%) and Brazil (60%). The ������Ƶ Trust Barometer, which is being presented at the World Economic Forum in Davos, highlights that U.S. companies are the least trusted in Europe (38%) and French-based companies are the least trusted in the U.S. (34%).

“Despite the corporate scandals of the last few years, the image of business is proving resilient with a stronger global economy and tougher government regulations such as Sarbanes-Oxley in the U.S.,” said Richard ������Ƶ, President and CEO, ������Ƶ. “Now business has an opportunity to take a lead on key global issues, such as fair trade, intellectual property rights and obesity. American corporations must particularly focus on building credibility in Europe, by emphasizing their global brands, while engaging in meaningful dialogue with local stakeholders and in partnership with governments and NGOs.”

Commenting on ������Ƶ’s Trust Barometer, Jeffrey Sonnenfeld, Associate Dean of the Yale School of Management, said “This survey profoundly shows the international image challenge to U.S. CEOs. The rest of the world sees these great firms in a far more skeptical light than at home, no matter how ubiquitous their products. Today’s “new breed” of CEOs needs to be global leaders by being conscious of local cultures and sensitivities.”

Trust in government also increased in the U.S. and Europe. Forty-eight percent in the U.S. expressed trust in their government, up from 39% in January 2003. In Europe, trust is 31%, up from 25% in January 2003. Fifty-four percent in Brazil and 67% in China expressed trust in their respective governments.

The Bush administration is the least trusted government in key global markets. Twelve percent of opinion leaders in Germany, 13% in France, 20% in Brazil, and 21% in the UK trust the Bush administration to “do what is right.” Sixty-six percent of Germans are less likely to purchase U.S. products because of the Bush administration, and 65% are less likely to purchase British products because of the Blair government. In France, 64% are less likely to purchase U.S. products, and 59% are less likely to purchase British products due to the current administrations. Opinion leaders’ trust in non-governmental organizations (NGOs) remains strong, particularly in Brazil (64%) and Europe (41%), where they are the most-trusted institutions. Two of the top four brands in Europe are NGOs (Amnesty International and World Wildlife Fund), and they are ranked among the most trusted brands in the U.S.

The study found that in every market, tangible corporate behaviors drive trust, such as “a history of delivering top quality products and services” and “listening to customer attitudes and opinions on satisfaction.” The most credible source for daily news is national country and languagespecific media, such as the BBC, which is first choice of 70% in the UK. Television is the first “most turned-to” source of “trustworthy information.”  

”Colleagues,” “friends and family,” and “regular people, like yourself,” plus experts who are seen as having no vested interest in the welfare of a company—academics, doctors and representatives of NGOs—are the most trusted spokespersons. In the U.S. and Europe, fewer than two in every 10 people said that CEO/CFOs are credible sources of information.

"You can't buy credibility with just a fat advertising budget, so you need to engage the public -- and employees -- with every available tool, and in language they understand,” said Michael K. Deaver, ������Ƶ's vice chairman. “Successful companies will avoid CEO-speak and communicate with their target audience through their national media using credible third parties, and directly via the Internet."

������Ƶ Trust Barometer Key Findings

• Trust in NGOs, which had been growing steadily in previous years, has peaked and declined slightly (U.S. = 47% vs. 49% in Jan 03, and Europe = 41% vs. 45% in Jan 03).
• European opinion leaders apply a significant “trust discount” for major U.S. brands operating in Europe, such as Coca-Cola (U.S. = 66% vs. Europe = 40%); McDonalds (53% vs. 27%); Procter & Gamble (70% vs. 49%); and Citicorp (47% vs. 26%).
• Asian and European firms do not have a “trust discount” in the U.S. Corporations cited included Shell (U.S. = 45% vs. Europe = 43%); Michelin (66% vs. 61%) and Samsung (56% vs. 48%); Bayer (58% vs. 49%); and Deutsche Bank (38% vs. 44%).
• Remedies to issues behind recent corporate scandals that topped the list included “Independent/strong boards” (U.S. = 18%; Europe = 16%); “greater individual control over pension/401(k) funds” (18% vs. 17%) and “separating consulting firms from audit services” (13% vs. 10%).
• “Limits on executive compensation” is more of a hot-button issue in Germany (18%) and France (17%), than in the U.S. (9%) or the U.K. (6%).
• In most markets, the most credible sources of information about companies are “articles in business magazines” (>45%), “friends and family” (>42%), “colleagues” (>35%), and “newsweeklies” (>30%). The least credible are “advertising” and “information conveyed by CEOs or CFOs.” (more) 
• The most trusted spokespersons in both the U.S. and Europe are “experts” who are seen as having no vested interest in a company’s welfare—doctors or healthcare specialists, academics, average people, and representatives of NGOs.
• “An average person, like yourself” experienced a significant jump in credibility as a spokesperson in both the U.S. (22% in Jan 03 to 51% in Jan 04) and in Europe (33% in Jan 03 to 51% in Jan 04).
• The credibility of “CEO of company” is relatively low (20% in the U.S., and 21% in Europe, up from 11% in Jan ’03 in the U.S., and down from 26% in Europe).
• Opinion leaders in every market cited key national media as their top sources of trusted information, challenging the convention that media is increasingly global.
• Web sites did not score highly as daily sources of media, except in China and Brazil where 18% of respondents listed CCTV’s and O Estado de Sao Paulo Web respectively, as key daily sources.
• Nearly twice as many opinion leaders turn to television first, before a newspaper, as a source of “trustworthy information,” except in France, where the trend is reversed.

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������Ƶ is the world's largest independent public relations firm with 1,800 employees in 39 offices worldwide. In 2003, The Holmes Group named ������Ƶ "Agency of the Year," and PRWeek voted its work for CIT "Best Campaign of the Year," the industry's most prestigious award for client programming. ������Ƶ's network includes four specialty firms - Blue (advertising), First&42nd (management consulting), StrategyOne (research) and BioScience Communications (medical education and publishing) - making it possible for us to offer clients a comprehensive spectrum of communications. Visit www.edelman.com for more information.

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Trust Barometer The fifth survey was conducted through telephone interviews among 1200 opinion leaders: 400 in the United States; 450 in Europe - 150 each in the United Kingdom, France and Germany; 200 in China and 150 in Brazil between December 2003 and January 2004 by StrategyOne. Opinion leaders are defined as being between 35-64 years, college educated with a household income of more than $75,000 in the U.S. and the equivalent in Europe. In addition, opinion leaders report a significant interest and engagement in the media, economic and policy affairs. The interviews were conducted via telephone and averaged 25 minutes in duration.

For further information, please contact:

Derek Creevey

Tel: 212 819 4834

E-mail: Derek.creevey@edelman.com