Failure to understand employees by CEOs creates culture of mistrust

trust in ceo

New research claims that employees trust their CEOs less than they did seven years ago, although trust in line managers remains the same.

The Trust in Leaders research, by The Institute of Leadership & Management revealed workers trust their CEOs considerably less than they did in 2011. Compared to 2011, the results show trust in CEOs has fallen by 8%. Respondents noted the biggest performance failing for CEOs was understanding the role of their employees and the contributions they make.

Despite this, the financial services sector should be buoyed by the results; of all the sectors researched, financial services leaders are considered the most trusted, followed closely by those in the health sector.  By comparison, the least trusted CEOs work in local and national government, closely followed by engineering/manufacturing and education.

At a time when gender equality regularly hits the headlines and there is insufficient diversity in FTSE boardrooms, more respondents said they trusted female leaders and female line managers than their male counterparts.  However, both male and female leaders perform poorly in accessibility, openness, consistency and understanding the roles of their staff.

Kate Cooper, Head of Research, Policy and Standards at The Institute of Leadership & Management, said: “With a decline in trust being a recurring theme reported in the media – against the backdrop of organisations going into administration and falling rates of productivity – CEOs are so much more high profile than they used to be.  Headlines about high levels of CEO remuneration, putting their own interests over those of the company and, most importantly, their employees, haven’t helped the situation, so it’s not surprising levels of trust have fallen over the last few years.

“Our research clearly shows there is a lack of trust at the top level, but interestingly, it is being maintained at the more personal level of line manager.  This is bad news for CEOs and should be a wake-up call for them.  For any organisation to be successful, trust is not ‘a nice to have’, but is intrinsic to the culture of the organisation.  The more someone trusts a colleague, manager or team member, the greater the likelihood that they will collaborate, share information and work effectively together.  Trust helps organisations to run smoothly, increases engagement, improves processes, drives individual and team performance, ultimately benefitting the customer or service user.  The more CEOs are trusted, the more likely employees are to believe in their ability to navigate the organisation through difficult times of economic uncertainty, such as those we are experiencing with Brexit.”

Key findings:

  • Overall, trust in CEOs has fallen overall by 8% since 2011.
  • CEOs in the financial services sector are the most trusted senior leaders, while those in local and national government are the least trusted.
  • Female leaders at all levels are more trusted than their male counterparts.
  • Trust in line managers has been maintained.