Definition of public trust in business

Public trust in business is the degree to which the public believes that business will act in a particular manner because the business has included the public’s interest into its own. It is a critical ingredient for social cooperation and market efficiency and a cause for deep concern when it is absent or threatened.

For example, the public trusts business or a business to produce useful, safe, and reliable goods and services because business is an enterprise that is most successful when it incorporates social values not only in the products and services it creates, but also in its daily practice.

Today, a large portion of the public believes that the majority of its vulnerability in business relationships is not voluntary but rather results from a sizable power imbalance that enables executives and companies to assume far less risk than the average person. This sense has been exacerbated by the global financial crisis, in which taxpayers have been called upon to shore up institutions whose risky behaviour put financial systems at risk.

Example
The sale of baby food is a great example of public trust in business. Parents will only purchase baby food if they believe that the company whose brand is on the product shares their interest in the well-being of their child. The brand on the product is actually a proxy for the entire responsibility chain - farmers, processors, distributors, and the store where the product is purchased. [1]

FT Articles & Analysis

Discussion