Family-owned firms are the most trusted businesses globally, a new survey released this month reveals, but one family business expert says not all family businesses are doing enough to exploit their reputation.
According to the 2014 Edelman Trust Barometer, 71% of respondents said they trusted family-owned businesses, just ahead of small and medium enterprises, which were trusted by 68% of respondents.
In North America family-ownership played an even bigger role in trust, with 85% of respondents there saying they trusted this ownership model.
In Asia, however, publicly traded companies were the most trusted (74%) while only 62% of respondents trusted family-owned firms.
Amy Treanor, global director and executive vice president at Edelman Square, the research division of PR firm Edelman, says: “In Asia, family business has a different perception, both being perceived as ‘big business’ and, at times, corrupt.”
But when it comes to global trends, Treanor says family businesses are likely trusted because they are perceived as ethical and putting their customers and stakeholders at the heart of what they do.
Nicholas Smith, chairman of the International Centre for Families in Business, based in the UK, says the results of the survey come as no surprise: “The characteristics that family businesses typically exemplify - a long term commitment to product, customers, employees and the local community based on solid financial foundations are just the sort of values that build trust and confidence.”
Smith says those operating in consumer markets often promote themselves as family businesses, but that this isn’t often the case in other types of industry, such as engineering or construction – something he says is a missed opportunity.
He added: “As we emerge from the recession the aura of stability and continuity associated with family ownership is just the sort of thing to inspire confidence and fill order books.”
When it came to the most trusted sectors, technology came out on top, while media companies and banks continued to trail, seeing little movement in public trust since 2009.
Companies based in Germany, Sweden, Switzerland or Canada were perceived as the most trustworthy, but BRIC nations (Brazil, Russia, India and China) suffered from a trustworthiness deficit.
This year’s Edelman Trust Barometer is the 14th time the annual survey has been published, and has a sample size of 33,000 respondents.