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Like it or not, ‘woke’ Corporate America is here to stay

So says Lisa Osborne Ross, who next month will become the first Black person to serve as chief executive officer for the US division of Edelman, one of the world’s largest and most influential public relations firms.

Ross, 58, is currently the firm’s US chief operating officer, having joined the company in 2017 amid a more than 20-year career that includes a five-year stint in the Clinton administration. Ross also spent 15 years at Ogilvy Public Relations, where she founded its multi-cultural practice.

Edelman, a private company, represents a who’s who of major firms that are on the front lines of today’s more socially-conscious approach to PR. They include Starbucks (SBUX), which in 2018 shut down 8,000 US stores for racial bias training following the arrest of two Black men waiting for a business meeting in a Philadelphia shop; and Unilever (UL) — parent company of the famously political Ben & Jerry’s, as well as such brands as Lipton and Dove — which recently pledged to spend more than $2 billion with suppliers owned and managed by women or people of color.
Just 10 years ago, it was still considered taboo for most companies to risk alienating customers by taking stands on divisive political issues. But Ross said Edelman’s widely referenced consumer research shows that major brands can no longer afford to sit on the fence.

“We’re used to staying out because it’s easier,” she told CNN Business during a recent interview. “But the landscape has changed. Your employees and your customers expect you to engage, and not just verbally. They expect you to do something.”

The Trust Barometer

Ross’s conclusions stem from the annual Edelman Trust Barometer. Every year since 2000, the report has surveyed roughly 30,000 individuals in multiple global markets to assess the general public’s trust in what Edelman defines as the four major institutions of power: government, business, non-governmental organizations and media.
Ross said Edelman’s data reveals a shift in Corporate America’s credibility on political issues beginning in 2016, the first year a majority of respondents ranked business above government as the most trusted institution. The survey also noted a widening gap in institutional trust between what the company called the “elite,” or “informed public” and the remaining groups covered in the report.

Trust among elites — individuals with at least a college education, who were very engaged in media and had incomes in the top 25% in each of the global markets — reached all-time highs in 2016, rising above 50% in three-fourths of the countries surveyed. But trust levels among members of the other groups dipped below that level in more than 60% of the countries surveyed because of rising income inequality and high-profile scandals involving greed and corruption by those in power.

However the credibility of the business community continued to strengthen. In the United States, 70% of elite individuals and 51% of remaining respondents expressed trust in business leadership in 2016.

“The general population sees business as the institution best able to keep pace with rapid change, ranking it well above government and higher than nongovernmental organizations,” the report said.

Ross said the increasing distrust of government and growing trust in business has persisted over the last five years. The release of the 2020 Edelman Trust barometer revealed that brand trust and brand reputation ranked second and third behind price as the most important factors for consumers deciding which new products to purchase.

Last year’s research also showed 77% of respondents aged 18-34 said trusting a brand was more important today than in the past. A majority of respondents across age and income categories also said they wanted the business community to serve as “protectors,” “providers” and “problem solvers.”

“The research said, ‘Business and government, I expect you to lead,'” Ross said.

Lisa Osborne Ross is set to become the new CEO of Edelman's US division on May 3.

Silence is not an option

Following the police killing of George Floyd nearly a year ago, support for the Black Lives Matter movement surged across the country. Ross said Floyd’s widely televised death while in the custody of Minneapolis Police officers galvanized corporate leaders unlike anything she’s seen during her two decades in the business.

“These CEOs and companies didn’t come to this on their own,” she said. “Their employee base and their customer base said, ‘I need to hear from you on this.'”

Edelman’s researchers have since found that customers expect companies to educate, advocate and use their influence to create positive social change.

Edelman’s August 2020 special report on “The Fight for Racial Justice in America” found 54% of Americans surveyed had a “continued expectation” for the brands they support to speak out about racism. The report also showed that 58% of Americans continued to support the Black Lives Matter movement even after protests in cities across the nation devolved into riots and looting over the summer.
Edelman’s 2021 Trust Barometer report also shows a partisan divide among Americans. Data collected a month after the presidential election showed that former president Donald Trump voters’ trust in business declined 6 points, to 55%, while President Joe Biden voters’ trust in private industry rose three points to 55%. Over the same time period, Trump voters’ trust in government plummeted 16 points to just 30% while Biden voters’ trust rose two points to 45%.

The report found that business remains the most trusted institution after the worldwide response to the spread of Covid-19 in 2020 caused respondents to lose additional faith in government. Those respondents, who were interviewed in December, said business was the only institution they viewed as both “competent and ethical.”

“Consumers, customers and employees will buy or boycott based on how they feel about your actions,” Ross said of US business leaders. “The counsel we’ve given clients throughout the summer and that we are giving clients right now on this issue is, ‘Silence is not an option.'”

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