Guidelines for Measuring Trust in Organizations

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Guidelines for Measuring Trust in Organizations

By Katie Delahaye Paine President, KDPaine & Partners

Published by The Institute for Public Relations

Guidelines for Measuring Trust in Organizations, By Katie Delahaye Paine Copyright © 2003 The Institute for Public Relations www.instituteforpr.com

Guidelines for Measuring Trust in Organizations

By Katie Delahaye Paine

January 2003: A coalition of organizations representing 50,000 professional communicators gathered in New Jersey to discuss ways to restore trust in American business. Buffeted by scandal and crisis since the Enron debacle, the average citizen’s belief in the integrity and honesty of corporate American had reached an all-time low. The coalition agreed on three basic actions that they could recommend to each and every CEO in America. 1. The CEO should articulate a set of ethical principles closely connected to their core business processes and supported with deep management commitment, enterprise-wide discipline and training. 2. The CEO should create a process for transparency that is appropriate for current and future operations. It should include an oversight committee, culture audit and consistent messaging. CEOs should ensure that they have professional, competent counsel to serve as a strategic integrator, champion, bridge builder, catalyst, facilitator and record keeper for appropriate transparency. 3. The CEO should establish a formal system of measurement, measurement of trust a business standard for that proved benchmarking and encouraging peer pressure and CEOs should make trust a corporate governance issue and a board priority tied to compensation The first two are essentially process issues that are relatively easy to implement. The third poses a problem to many corporations which has only been addressed by a few: How to measure trust? This document offers standard guidelines to help professional communicators answer that question and implement the third directive of the PR Coalition.

Guidelines for Measuring Trust in Organizations, By Katie Delahaye Paine Copyright © 2003 The Institute for Public Relations www.instituteforpr.com

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FOREWORD Trust or lack thereof, has a measurable impact on the financial health of an organization. Following the Enron scandal, its accounting firm, Arthur Anderson, was essentially destroyed because its clients lost confidence in its results. Sales of fast foods take a dive whenever news of tainted beef hits the airwaves causing consumers to question the safety of their favorite burger. Conversely, a key component to FedEx’s success is customer confidence in the company’s ability to deliver “when it absolutely positively” has to be there in the morning. What is disturbing is that even though we intuitively know that trust is important, we have yet to embrace a consistent methodology to measure the trust of an organization. Companies have relied upon customer loyalty surveys or employee morale surveys to determine how people feel towards an organization, but there is little in the way of research that specifically focuses on trust. We hope that with these guidelines, organizations will agree with us that setting up a system to measure trust in your organization is a critical component of corporate governance. Katie Delahaye Paine Chair IPR Commission on Measurement and Evaluation

Guidelines for Measuring Trust in Organizations, By Katie Delahaye Paine Copyright © 2003 The Institute for Public Relations www.instituteforpr.com

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OVERVIEW One of the key action items coming from the Coalition summit in January was the need to have a single, unified approach to measuring trust. Rather than force-fitting all programs into one system, The IPR Measurement Commission proposes a set of guidelines that would recommend different measurement methodologies based on the type of organization seeking to measure its trust. This document outlines our basic definitions of trust, as well as guidelines...
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