Trust Digest 39 (February 17, 2014)


CVS Execs Are Taking a Stunning Risk
I hope other companies will be inspired and move beyond the appearance of values integrity through clever wordsmithing and image motivated corporate philanthropy. The path toward organizational trustworthiness goes through foundational values and ongoing acts of courageous drift correction.
Key Words: Trust, CVS, Values
Trust Issues: Responsibility, Integrity, Benevolent Concern, Reputation


Private, 'Mom & Pop' Businesses Get Props For Trustworthiness
Among North Americans surveyed for the report, 63 percent expressed trust in privately held businesses, compared with 60 percent for publicly traded companies. Family-owned businesses garnered the highest trust rating, at 85 percent. Edelman’s latest Trust Barometer revealed something interesting about Americans’ views on privately held companies – a huge but often-overlooked part of the economy generating roughly half of U.S. non-farm GDP and 65 percent of new jobs.
Key Words: Small Business, Trust
Trust Issues: Reputation, Honesty, Stakeholders


AOL Chief Reverses Changes to 401(k) Policy After a Week of Bad Publicity
AOL chief executive Tim Armstrong told employees in an e-mail Saturday evening that he was reversing the company’s 401(k) policy and apologized for his controversial comments last week. “The leadership team and I listened to your feedback over the last week,” Armstrong wrote in his e-mail to the company. “We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution.”
Key Words: AOL, Pay policy, Leadership
Trust Issues: Accountability, Benevolent Concern, Reputation, Motives


What Would Lincoln Do?
Abraham Lincoln, whose birthday we mark this holiday weekend, had less leadership experience than almost any earlier president. George Washington and Andrew Jackson had been generals, several other presidents had been governors, and all the Southerners had owned plantations. They had run organizations and managed men. President Lincoln, by contrast, was a former state legislator, a one-term congressman and the senior partner of a two-man law firm; he kept his most important papers filed away in his hat. And yet Lincoln filled the office of president so effectively that he regularly tops historians' rankings of great presidents.
Key Words: Leadership, Lincoln
Trust Issues: Responsibility, Communication, Competence, Integrity, Reputation


Tom Hanks Tops Our List of the Most Trustworthy Celebrities
“Trustworthy, like influential, can be very subjective descriptors based on the nature of their celebrity. For the most part, it reflects how genuine people perceive that person to be,” says Gerry Philpott, president of E-Poll Market Research, which provides the E-Score data. “It positively impacts a celebrity’s ‘brand’ for getting top roles and endorsements if consumers see them as credible and believable.” Only a few people know how trustworthy Hanks is in real life. What people trust is his image.
Key Words: Celebrities, Trustworthiness
Trust Issue: Reputation


Who Can You Trust?
If you choose to trust new clients, contractors, or collaborators, you make yourself vulnerable: Your outcomes, financial and otherwise, now depend on their fidelity. But if you insist on verifying each claim and accounting for every detail before a deal is signed, you’ll slow the process and increase costs, potentially putting yourself at a disadvantage.
Key Words: Trust, Integrity
Trust Issues: Communication, Reputation, Motives, Risks, Stakeholders, Integrity


Barclays Advisers' New Performance Metric: Their Behavior
Barclays [BARC.LN -1.33%] PLC is shaking up the way it pays its U.S. financial advisers, breaking with industry practice as the British bank seeks to clean up its image. Advisers at the Barclays Wealth & Investment Management division in the Americas will no longer get paid solely on how much money they bring in. Going forward, their compensation could be docked for misconduct.
Key Words: Barclays, Performance Metrics
Trust Issues: Accountability, Competence, Transparency


iPhone Owners Admit Having ‘Blind Loyalty' to Apple
Some three fifths of more than 2,000 iPhone users questioned in a survey said they would always switch to Apple’s latest iPhone, admitting to a “blind loyalty” to the brand.
Key Words: Apple, Loyalty
Trust Issues: Reputation, Motives, Stakeholders, Loyalty


IBM's CEO Visits China for Trust-building Talks with Govt Leaders: Sources
A slide in IBM Corp's sales in China amid a broad backlash against claims of U.S. government spying has triggered a rare visit to Beijing by Chief Executive Officer Ginni Rometty. The head of the world's biggest technology services company arrives in China's capital on Wednesday for three days of meetings with government leaders, according to people familiar with her visit. The visit comes as U.S. firms like IBM and Cisco Systems Inc seek to restore trust with Chinese regulators and reverse slumping sales.
Key Words: Trust, IBM
Trust Issues: Communication, Transparency, Regulation


South Korea Asks for Trust; North Agrees, Lets Families Have Reunions
In stark contrast to the bellicose gesturing that has haunted relations in the recent past, North and South Korea took conciliatory steps in each other's direction Friday.Both sides will halt the harsh rhetoric, they agreed at a bilateral meeting on the heavily militarized border that divides them. They hope that this and other agreements will serve to build trust between Pyongyang and Seoul, Kim Kyou-Hyun, a high South Korean security official, said after the meeting wrapped up.
Key Words: North Korea, South Korea, Trust
Trust Issues: Communication, Benevolent Concern, Regulation, Motives, Stakeholders, Risks


Bailout Gave Small Bank a Chance to Survive
The image of bank bailouts in the United States was set by the megabanks, and with it widespread public hostility to the bailouts. But more than just giant banks received bailouts. More than 700 banks received TARP money, most of them unknown outside their hometowns. Some of those banks failed anyway, at perhaps a greater cost to the government, including the bank insurance fund, than would have been the case otherwise. But others prospered, and the government made money while saving them.
Key Words: Banks, Bailouts
Trust Issue: Regulation


Management Spotlight: Jim McEleney, BNY Mellon
Jim McEleney Chief Operating Officer of BNY Mellon speaks with Ethical Corporation about the company’s approach to Corporate Social Responsibility in Europe, the Middle East and Africa.
Key Words: BNY Mellon, CSR
Trust Issues: Responsibility, Ethics, Benevolent Concern, Reputation


Pay Study Shows Bank Chiefs Give Value for Money
Despite some public anger over bankers’ bonuses, financial services chief executives represent the best value for money for shareholders, according to analysis by a remuneration advisory service.
Key Words: Bankers’ pay
Trust Issues: Accountability, Competence, Reputation, Regulation


Using Pay to Change Culture
Many companies, at critical junctures in their life cycles, must transform their cultures to regain or sustain success. A number of factors combine to define a company’s culture (see table), but across all factors, pay can be a key lever for sending signals about changes in priorities, influencing behavior, and driving transformation.
Key Words: Executive Pay
Trust Issues: Accountability, Competence

What Can New Pilots Make? Near Minimum Wage
A widening shortage of U.S. airline pilots is spotlighting the structure of an industry built on starting salaries for regional-airline pilots that are roughly equivalent to fast-food wages.
Key Words: Pay, Pilots
Trust Issues: Accountability, Competence


SEC Investigations and Enforcement Related to Financial Reporting and Accounting
Between 2006 and 2012, the number of opened investigations related to financial reporting or disclosure dropped from 304 to 124, while the number of filed cases dropped nearly 70%, from 219 in 2007 to 68 in 2013. Indeed, when the SEC articulated its “five priority areas” for its enforcement program in 2010, creating specialized units to focus on those areas, no unit was formed to investigate public company financial reporting or disclosure.
Key Words: SEC, Regulation
Trust Issues: Accountability, Transparency, Regulation, Motives


Apple Publicises Mineral Suppliers with Links to Conflict Zones
Apple has publicised a list of its suppliers who may be sourcing minerals for components from conflict zones.
Key Words: Apple, Conflict minerals
Trust Issues: Responsibility, Ethics, Transparency, Reputation, Stakeholders


Barclays Is Failing the Trust Test: Questions Raised After U.K. Bank Releases Results Early
The U.K. bank hastily announced its profit before tax figures for 2013 on Monday along with an adjusted measure a day before schedule, after an apparent early disclosure in the Financial Times. That followed weekend news that details relating to thousands of customers in its now-closed financial planning division had been allegedly stolen and sold: That matter has now been referred to U.K. regulators. The two stories add to the impression that Barclays is too accident-prone an institution to be worthy of customer—or investor—trust. Chief Executive Antony Jenkins’s strategy to regain confidence is focused on cutting back Barclays’s controversial investment bank. He should be just as concerned with the retail banking arm he ran for three years from 2009.
Key Words: Trust, Barclays
Trust Issues: Responsibility, Accountability, Competence


Pharma's Reputation Stays Low in 2013
The reputation of pharma companies remained at a low ebb last year, with performance ratings down across the board compared to 2011, according to a survey of patient groups.
Key Words: Pharmaceuticals, Reputation, Trust
Trust Issues: Reputation, Stakeholders


When Politicians Help Friends
New York City Mayor Bill de Blasio set off cries of political favoritism this week after he placed a late-night call to police to ask about the arrest of a supporter. He’s hardly the first.
Key Words: Bill de Blasio, Political favortisim
Trust Issues: Accountability, Ethics, Transparency, Reputation


Skin-whitening Creams Reveal the Dark Side of the Beauty Industry
Capitalising on ideas of racial hierarchies and intolerance, companies continue to peddle products that betray their corporate values.
Key Words: Beauty Industry, Skin-whitening
Trust Issues: Responsibility, Ethics, Transparency, Benevolent Concern


Bank Federation Head Says EU Regulatory Goals Ignore Reality
Christian Clausen, the president of the European Banking Federation, criticized regulators for pursuing a model he said ignores the reality of national needs. Efforts to harmonize banking standards across borders create challenges for some markets, Clausen said yesterday in an interview in Stockholm. He says a prime example of this is a European Banking Authority proposal that would force some Scandinavian banks to cut their holdings of covered bonds to make room for sovereign debt.
Key Words: Bank Regulation
Trust Issues: Accountability, Regulation


Six More Charged in Libor Probe
Six more individuals will be charged criminally by the UK's Serious Fraud Office by the end of this month in connection with its probe of alleged Libor-rigging, according to two people familiar with the investigation.
Key Words: Libor scandal
Trust Issues: Accountability, Regulation


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