Consumer trust helps maintain the social license to operate that society either grants to industries and companies — or denies them.

“Every organization, no matter how large or small, operates with some level of social license, or the privilege of operating with minimal formalized restrictions (legislation, litigation, regulation or market mandates) based on maintaining public trust by doing what’s right. Organizations are granted a social license when they operate in a way that is consistent with the ethics, values and expectations of their stakeholders,” CFI researchers say.

Those stakeholders include customers, employees, the local community, regulators, legislators and others who have an interest in how the organization impacts them, the researchers say. “Maintaining the public trust that protects your social license to operate is not an act of altruism; it is enlightened self-interest.

“Once lost, either through a single event or a series of events that reduce or eliminate stakeholder trust, social license is replaced with social control. Social control is regulation, legislation, litigation or market mandates designed to compel the organization to perform to the expectations of its stakeholders …”

The crux of CFI’s research last year was development of its Trust-Building Transparency (TBT) model.

“We believe our breakthrough TBT model provides a clear path to effectively address growing public skepticism about today’s food,” Arnot says. “Consumers have been asking for more transparency, but it has not been well-defined. This research defines transparency and provides direction for how to use transparency to build trust. Effectively implementing this new model will help companies and organizations build trust with their stakeholders and consumers.”

Seven elements of Trust-Building Transparency

According to the Center for Food Integrity (CFI), the seven elements of Trust-Building Transparency are:

  • Motivation. Act in a manner that’s ethical and consistent with stakeholder interests.
  • Disclosure. Share publicly all information, both positive and negative.
  • Stakeholder participation. Engage those interested in your activities or impact.
  • Relevance. Share information stakeholders deem relevant.
  • Clarity. Share information that’s easily understood and easily obtained.
  • Credibility. Share positive and negative information that supports informed stakeholder decision-making, and have a history of operating with integrity.
  • Accuracy. Share information that is truthful, objective, reliable and complete.

Conversely, the opposite of these are elements that can lead to moral outrage among consumers, including:

  • Lack of transparency
  • Intentional wrongdoing
  • Intentionally misleading
  • Putting private interest ahead of public interest
  • Insensitivity to public interest (tone deaf)
  • Callous disregard for public interest (malicious indifference)
  • Historical record of poor performance
  • Failure or unwillingness to accept responsibility
  • Impact on vulnerable populations or systems (people, animals and the environment)
  • Negligence in following industry best practices

“Some argue that maintaining public trust is a worthy goal, but not relevant to success in business. This outdated notion fails to recognize the financial benefit of maintaining the trust of stakeholders who can determine the level of social license or social control an organization enjoys,” CFI researchers say.

Editor’s note: CFI research can be found at www.foodintegrity.org/research.

 

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