PricewaterhouseCoopers is stressing the concept of trust in its recently restructured firm and in a new survey that examines where business leaders, customers and employees differ on trust.
In June, PwC began reorganizing the firm into two broad business segments: Trust Solutions and Consulting Solutions (
Changes are also being made internationally across PwC’s global network, which is also emphasizing the concept of trust, with a strategy called “The New Equation.”
“Our purpose is building trust in society and solving important problems,” said Wes Bricker, vice chair and U.S. Trust Solutions co-leader at PwC. “That really frames our emphasis in building out the Trust Solutions segment together with our Consulting Solutions segment. Those are the two pieces of our business and our Trust Solutions segment is the world's largest trust platform. We're really excited about where we’re going in building trust in society and helping our clients understand the importance of trust.”
The moves come at a time when trust has eroded in institutions in the U.S. and around the world amid the strains of the continuing COVID-19 pandemic and the accelerating pace of climate change. The divides have led to distrust in the media, politicians, the medical profession and other parts of the establishment.
The companies that were the most successful in building trust were those who seemed to back their words with actions during the pandemic, according to PwC’s first-ever
Business leaders need to start by understanding where trust is and how to build it. “There was consensus in the survey results in the foundational elements of trust,” said Bricker. “It was data protection and cybersecurity. It was treating employees well. It was ethical business practices and admitting mistakes. Those four foundational items were consistent across business executives, consumers and employees.”
The survey found some differences as well. “Business leaders often would take a broader view of trust, and they would include other additional areas,” said Bricker. “And that’s a good thing. It is areas like sustainable value, value chain management, responsible artificial intelligence, transparency and ESG reporting. Those tended to be corporate topics. Clearly, there are benefits to consumers and employees, but business leaders tended to also include emphasis on those items. Employees as a point of differentiation were more likely to emphasize holding the leadership accountable. That really runs to the importance of business leaders communicating with employees about what's going well and what’s not and what they’re learning from it.”
Employees cited the highest level of trust (77%) in their direct managers and co-workers and companies compared to 63% for their company’s board, according to the PwC survey. Meanwhile, 80% of employees report trusting their company the same or more now than before the pandemic.
As climate change produces a cascade of natural disasters across the U.S. and other parts of the world, the survey found a disconnect between leaders and consumers on environmental, social and governance matters. Only 19% of consumers list ESG as a top 5 driver of trust. However, 45% of business leaders surveyed have prioritized ESG reporting.
Concern has grown in recent years over whether accounting firms can be trusted, with major firms running afoul of regulators in Europe, the U.K., Asia and to some extent the U.S. over audit missteps involving companies like Wirecard and Carillion, similar to the wave of accounting scandals in the early 2000s at companies like Enron and WorldCom that led to the Sarbanes-Oxley Act and the creation of the Public Company Accounting Oversight Board. Regulators in the E.U. and the U.K. have proposed that firms separate their audit and non-audit practices. PwC’s move to divide the Trust Solutions and Consulting Solutions segments could be a way to anticipate such demands.
“The audit profession plays an outsized role in helping to build trust and confidence in the system of reporting, whether it's financial reporting or non-financial reporting,” said Bricker. “And that's important to businesses as they communicate with their employees, consumers and investors. They need trust. They can’t do it on their own.”
The survey found that 73% of the respondents cited the CEO as either responsible or accountable for trust, and 65% said the same for the CFO.
“What's interesting about that for the audit profession is that the CEO and the CFO are top of the list for owning trust and accountability within the organization,” said Bricker. “The lessons we’ve learned over time about the inputs to high-quality, trusted financial reporting — we can use those lessons elsewhere. It’s lessons like having accountability, having separate oversight, for example, from an audit committee that's led by experts and then an outside independent expert assurance provider. Those lessons are lessons that help us. Expand the tools for business leaders in building trust, because we know trust is multidimensional. It's not linear. It doesn't just simply grow over time. It evolves through many facets and as priorities change, beyond the financial statements into business conduct, the pressure on business leaders to consider and to address the needs of all of their stakeholders and to constantly shift how they meet and manage stakeholder expectations will be critical.”
The survey found 43% of the business leaders identified the variation in stakeholder expectations as a top challenge to building trust. The accounting profession may be able to find ways to help build more trust in business and society despite the distrust that seems to be so pervasive now.
“One of the top drivers of trust for consumers is accountability,” said Bricker. “Accounting helps foster accountability. It’s insightful for business leaders to understand where consumers are relative to where business leaders have been. For business leaders, 56% saw accountability as extremely important, but only 46% of their companies would say they fully implement it. So, it’s a top concern for consumers. Just better than a majority of business leaders see that, and less than a majority of those companies have actually implemented it. So there’s work to do here. That’s why this should be on every business leader’s agenda.”
Bricker hopes the PwC survey results will help inform the discussion among business leaders, accountants, employees and consumers about where trust is among critical groups. “Understand that trust is multidimensional,” he said. “It’s not linear, which means it requires action, and those actions are critical around accountability, around culture and around clear communications. We’re going to continue to move forward on the trust agenda. Business has a stake in that, as does the accounting profession.”
