02 September 2009

In the current climate of economic uncertainty and an air of mistrust – in everyone from bankers to MPs – up and down the country, CEOs must work harder at demonstrating their personal integrity, in addition to their leadership ability, if they are to inspire trust in their staff.

With an Index score of 59 [on the overall scale of 0 – 100], CEOs are significantly less trusted than line managers, who score 69. CEOs at the helm of the largest organisations have the most work to do, as the findings show that trust falls as organisational size increases.

The research reveals that:

-   CEOs of large public sector organisations engender the lowest levels of trust in their staff, with comparatively low Index score of 57

-   Private sector CEOs are slightly more trusted by their employees, with an Index score of 61

-   Line managers fare much better than their top bosses across the board, with an overall Index of 69

Senior managers in national/local government and the media are the least trusted, while those in the charity and retail sectors enjoy higher levels of trust than all other sectors. Surprisingly, trust within the financial sector is high despite recent economic turmoil. 

Women have higher levels of trust in their managers than men when they start a job, but this falls sharply the longer they stay in the same position, raising serious questions about the quality of women’s experience in the workplace. 

The Index identifies and measures the six factors that are fundamental to trust – ability, understanding, fairness, openness, integrity and consistency – identifying a clear roadmap for individuals to build trust in themselves and their organisations. 

The research reveals that the two most important factors for CEOs are ability and integrity.  In contrast, though line managers are more trusted, employees expect a more diverse range of qualities and characteristics from them. As well as ability (top of the list) and integrity, line managers are required to demonstrate understanding, fairness and consistency.  

ILM's Chief Executive, Penny de Valk, said: “Trust is crucial to the performance of an organisation, and a cornerstone of good leadership. Teams are more effective in a trusting environment, and people work better and harder if they trust their leaders.  

“But for leaders, being good at their job is simply not enough anymore. They have to be aware of their ‘signal value’ and how this is perceived by employees as a sign of integrity. The more senior you are, the more the gap between what you say and what you do – or what you don’t say or do – is amplified.  In recessionary times, employees are anxious and this spotlight will be yet further intensified.” 

The research also revealed that length of tenure is a vital component of trust. The longer CEOs and line managers have been in post the more trust employees have in them. Trust takes time to earn, and the research indicates that this is unlikely to be achieved in less than five years – so the low Trust Index scores of CEOs of large organisations is partly a reflection of shorter periods at the helm. 

Matthew Gwyther, editor of Management Today, said: “Trust in business and in politics has taken a severe battering this year. We wanted to find out just how much levels of trust been eroded within businesses. The Index scores, for CEOs particularly, are closely aligned to the length of time they have been in post.  This is a conundrum for UK business culture which has seen the average tenure of a CEO shrink to under five years. Should this signal a return to longer-serving CEOs, or do our leaders just need to work that bit harder to demonstrate characteristics such as integrity during a short stint in charge?” 

The Institute of Leadership & Management and Management Today polled 5,673 people – 2,938 managers and 2,735 non-managers – for the research. They came from the private, public and charity sectors, and their organisations ranged in size from SMEs to global corporations. The survey asked how much they trusted their line managers and their CEOs, presenting a snapshot of trust from within an organisation. 

The full report, ILM/MT Index of Leadership Trust 2009, is available to download from ILM’s website at www.i-l-m.com/trustindex.

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For further information or copies of the full report please contact Amy MacLaren (amy@colmangetty.co.uk), Rebecca Griffiths (rebeccagriffiths@colmangetty.co.uk) or Ellie Backhouse (ellie@colmangetty.co.uk) at Colman Getty, or call 020 7631 2666.

Spokespeople available for interviews (contact Colman Getty):  Penny de Valk, Chief Executive, ILM 

Notes to editors

The ILM/MT Index of Leadership Trust 2009 will be launched on Wednesday 2 September at 6:30pm at a reception at One Alfred Place, London.  The keynote speaker will be Greg Dyke, former Director General of the BBC.  For a press pass, please contact Colman Getty. 

The Institute of Leadership & Management (ILM) is Europe’s leading management organisation. ILM partners with more than 90,000 individuals and organisations each year to help them fulfil their potential and achieve success through its wide range of flexible leadership and management development solutions. 

From industry-leading qualifications and membership services to specialist learning resources, all ILM products and services are built on in-depth research and benchmarked against best practice standards. Supporting a fast-growing community of over 30,000 practising leaders and managers, ILM’s membership services are designed to provide ongoing continuing professional development throughout every stage of a manager’s career. 

Backed by an in depth programme of thought leadership research, ILM operates internationally, improving leadership and management skills, knowledge and outputs across all sectors, from financial services to the armed forces. http://www.i-l-m.com/ 

Management Today (http://www.managementtoday.com/) is Britain’s leading business magazine.  A feature on the ILM/MT Index of Leadership Trust will be published in the September issue of Management Today, the UK’s leading business magazine, out on 3 September 2009, priced £4.70

FreshMinds

FreshMinds Research work across industries to help their clients better understand their markets, competitors and customers and to explore new market opportunities.

Their strength lies in providing strategic insights through comprehensive and robust research, and their holistic approach enables them to deliver analytical and creative solutions to meet a wide range of needs. 

FreshMinds’ innovative approach to research and consultancy has not only seen them named the Market Research Society’s ‘Best Agency’ two years running, but they were also last year’s London winners of the Bank of Scotland’s £35m Entrepreneur Challenge. For more information visit http://www.freshminds.co.uk/  

About the research

The study was conducted via an online survey administered by FreshMinds Research in May and June 2009. A total of 5,673 people participated, drawn from three distinct sample groups: 

·  A general population sample of employees was sourced from an online panel provider. This included a control for the proportions of managers to non-managers (one in five respondents having people management responsibilities) and was chosen to be broadly representative of the employed population;

·  ILM members were invited to participate in an identical survey during the same fieldwork period;

·  Management Today readers were also invited to participate in the survey via references in the hardcopy editorial and in electronic mail-outs 

The Index measures trust in relation to six defined dimensions of a trusting relationship. These dimensions are based on significant amounts of robust research and align with ILM’s framework of leadership and management.   

The six dimensions are:

1.     the manager’s ability to do their job (Ability)

2.     displaying knowledge and understanding of their employees’ roles and responsibilities (Understanding)

3.     behaving fairly and showing concern for the welfare of employees (Fairness)

4.     being accessible and receptive to ideas and opinions (Openness)

5.     striving to be honest and fair in decision making (Integrity)

6.     behaving in a reliable and predictable manner (Consistency) 

The survey asked respondents to assess the importance they placed on these dimensions, distributing a total of 60 points across the six factors. Respondents were then asked to rate their CEO and line manager against these measures on a 1–10 scale. 

The relative importance that respondents applied to the six dimensions was then applied to the scores. This ensured that the qualities they thought most important in establishing trust in their managers were commensurately indicated. The resulting trust index scores lie between a minimum of 0 and a maximum of 100.