The March 2021 edition of the Australian Institute of Company Directors magazine, aptly titled ‘Company Director’ contains an article that names the Top 10 Most Trusted Brands in Australia. It also names the Top 10 Most Distrusted Brands.
The data is drawn from the most recent Roy Morgan Risk Monitor. The article discusses some key points, and they might apply to your business (or to you as an individual if you think of yourself as having a brand):
- ‘Moral Blindness’ (think of the banks’ behaviour that was exposed by the Royal Commission) is a significant risk factor in the Boardroom;
- Distrust is not representative of uncertainty about whether to trust, nor the passive absence of trust – it is something more damaging than that;
- Trust is a brand equity asset; distrust is a brand equity liability.
So, whilst the public gaze falls upon big, visible brands the same principles apply to you. Your star can definitely rise and fall.
Whilst it takes concerted and sustained effort to move the needle in your favour, it seems it takes just one incident to ‘blow up’ your brand equity and become distrusted. The effects can be widespread and long-lasting.
Distrust is probably a precursor to diminished returns – customers will ultimately vote with their feet. That affects value (think share price) and retention of key employees (who doesn’t want to be proud of where they work?). When all of those cards are stacked against you, perhaps you can appreciate the enormity of the task of climbing back to the top again.
Brand Trust – Board Agenda
So where are ESG (Environmental, Social and Governance) matters on your Board agenda? Given that brand equity in most instances doesn’t show up on your balance sheet, does it get the prominence it deserves?
And how much prominence should it get? The answer is “it depends”. What are your objectives and is brand important to those objectives? Certainly, large companies recognise the power of their brand and spend millions and millions of dollars to promote it, to create affinity with their target market.
You may not have the pockets to do that. So, you may ‘only’ want to put governance procedures in place to prevent the type of incidents that breed distrust. To protect your brand rather than actively promote it.
There is no ‘one size fits all’ answer and the point of sharing these thoughts was not to be directive but to get you thinking. I hope we’ve done that.
If you would like help constructing your Board agenda to ensure the focus is on the right things, please give us a call on 1300 656 141.
- The Top 10 Most Trusted Brands as reported in Company Director are (1) Woolworths, (2) Coles, (3) Bunnings, (4) Aldi, (5) Qantas, (6) Apple, (7) Kmart, (8) ABC, (9) Microsoft, (10) Myer
- The Top 10 Most Distrusted Brands as reported in Company Director are (1) Facebook, (2) Telstra, (3) Amazon, (4) News Corp/News Ltd, (5) AMP, (6) Rio Tinto, (7) Huawei, (8) Google, (9) BP, (10) Westpac